Thursday, August 13, 2009

Delisted Company: Man Wah


Man Wah, the biggest market cap furniture company in Singapore was delisted as 11 Aug 09. The reasons for its delisting were:


* Low trading liquidity of 514,505
* Upfront premium of 9.52% based on price at the previous day of announcement, 4 Jun 09
* Lack of understanding from local investors

Company Info:

Man Wah Holdings Limited is a home furnishing company primarily engaged in the design, manufacture and sale of a range of mid to high-end motion sofas (specialty sofas with features, such as recline and footrests), which are sold in the People’s Republic of China and Hong Kong, and direct export to the international market under its brand Cheers.

Investment tips:

I should have track this stock earlier and try to profit the almost guaranteed 9% premium in 2 months. The chance of the delisting was high because the company owns a majority of share.

Other companies delisted during this period was CK Tangs and Singapore Petroleum Co(SPC). SPC was delisted after being takeover by PetroChina. Its premium was even higher at 20+ %.

I will setup alerts for SGX announcements regarding "cash offer". There seems to be a very short window of opportunity to profit. However, there is an risk that the "cash offer" get rejected. Nevertheless, even if the stock didn't delist successfully, it means there is a positive sentiments it is worth higher.

References:

  1. Channel News Asia Forum - Discussion about opposing Man Wah delisting

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