-3x Short China Discussion Threads

[czar] 26/4/2011 14:21

How interesting, you could sell all your shares at 380p up to 20th April but some decided not to do that, they prefer to sell now at 340p. That proves it, a fair proportion of investors in this market should never be involved, they are plain stupid. The gamble now is that when they list in HK they trade higher than 380p. Clearly the directors think they will.

[royalt] 12/4/2011 09:53

Great thanks chaps.

[fft] 11/4/2011 16:16

Nat west (who use TD) also have a default of no shares tendered. They also dont understand the offer either as they say you may be scaled back if you tender more than 34.1% (!). of course, the whole point is for the 34.1% of shares not involved in going private to be bought. i thought that was clear, but obviously not to TD.

This could lead to a large number of shares not being tendered and being delisted while stil in PI hands.

[edmundshaw] 11/4/2011 15:15

Latest time and date for receipt of Tender Forms 20 April 2011 1pm.

Typically, you need to get it done with your broker a bit earlier. So don't delay too long.

[0rb1t] 11/4/2011 15:11

RoyalT - the default option is that no shares will be tendered. For TDwaterhouse you can select your choice by going to the Corporation Actions part of their website.

[dreggspicker] 11/4/2011 14:07

ring them up and say you want to sell the lot (if that is what you want) I am pretty sure they will take all you have.
I have decided to sell up and probably put the proceeds in to a high risk mining co. MMS, when it comes out of tempory suspension.

[royalt] 11/4/2011 12:22

What do I need to do here? TDwaterhouse has sent a letter saying action is required. What happens if I dont do anything? Do I still get the 380p?

Tender Offer
Description China Shoto Plc has announced a tender offer with a record date of 20th April 2011 to repurchase approximately 34.1% of the share capital in issue. The terms of the offer are as follows:

For each share held in China Shoto Plc - 380 pence in cash.

Shareholders wishing to tender their shares are required to specify the total number of shares they wish to tender. Shareholders may elect to tender more than their basic entitlement of 34.1% however, such excess tender may be subject to scaling back.

The Company has also announced its intention to cancel the listing of its Ordinary shares on AIM, with effect from 5th May 2011.

[evaluate] 11/4/2011 08:27

Management have less than 30% at Geong.

Would require a much bigger premium than at CHNS.

[boadicea] 10/4/2011 15:20

.... and quite likely to go the same way.

[welsheagle] 10/4/2011 15:00

Geong(GNG)looks a good Chinese company to invest proceeds from tender offer.

[edmundshaw] 10/4/2011 11:25

Boad, I think zang means that assuming most of the shares take up the offer, the management could hold 90% of the company afterwards. Then his case applies...

[edmundshaw] 09/4/2011 11:59

zang, that is a very good point. And another reason why there might be no advantage in keeping the shares, if you end up with the same deal at a later date, and a little extra risk in the meantime.

[zangdook] 09/4/2011 04:24

By the way, my post above has reminded me that after delisting the management of CBI ended up with over 90% of the shares, and they proceeded to do a compulsory repurchase. I suppose something similar might happen here, and why not if they have the money?

[zangdook] 09/4/2011 04:14

I too am considering holding on to a part of my holding. If I accept the tender on half I shall have made a reasonable return and I don't mind holding a free carry on the rest.

However, I am also considering accepting the tender and then trying to buy back cheaper during the couple of weeks between the close of the tender and the delisting. Looking at the charts of SFT and CBI, the last two Chinese AIM companies to delist without another listing elsewhere, there does seem to have been a short time when the price was substantially lower than the tender. What I haven't been able to find out is whether there was actually any stock available then - I usually use Google Finance for historical price data, but they don't have trade data (and they don't seem to have any data for SFT, and don't even recognise the ticker for CBI).

Does anyone have any views on this, or know a (preferably free) site with historical trade data? In theory market makers are supposed to make a market, and there may be a few numpties who miss the deadline and sell afterwards. Or would the mms simply shut up shop for retail buyers and pass anything they can pick up to the company for a fat profit?

Edit: Google do have a China Biodiesel, but they call it ETR:F7S and price it in Euros, so I don't know what's going on there. But anyway I need trade data, not just price data.

[boadicea] 08/4/2011 21:55

phil - You will find the full delisting proposal here and may wish to read Part 2 entitled "Risk factors" (page16) -


Afaik, the company will remain an English/Welsh plc after delisting (unless it says otherwise in the document which I haven't read in full.)

[philw2009] 08/4/2011 20:54

I have some shares in my SIPP with Hargreaves Lansdown. It seems like actually I don't have to sell my shares like I thought I would have to.

So since I don't have access to the money in my SIPP for another 22 years, what's the risk involved in keeping them? I'm thinking that they'll relist in HKG within a couple of years max? HL doesn't trade on the HKG stock exchange at the moment but they probably will in the future I imagine?

So is there any other risks I haven't considered, other than the company just not being very successful?

[boadicea] 07/4/2011 21:56

I have decided to accept the tender offer, but for those that do not, I note that -
"The company intends to set up a matched bargain facility after the delisting. Details will be made available on the company website at www.chinashoto.com

[evaluate] 07/4/2011 16:52

JTC,

I also concur.

Tempted to hold on - but a bit scared of what might happen if I do.

[crawford] 07/4/2011 16:34

JTCOD,
I have to inform my broker before 14th April (with Iweb). Agree that 380p is very undervalued.

Just checked have to inform broker before 14th April, I've amended the above.

[jtcod] 07/4/2011 16:26

Against my better instincts I am going to accept the 380p offer. I have not been able to gain any feedback on the managements attitude toward shareholders that stay on. Either from the management direct or from their advisers.

I must say that I have never seen an offer deadline handled in such a hurry. Brokers are requiring instructions by Monday. Incredible really. I remain convinced however that there will either be a bid for the company within a year or more likely a new listing within 24 months. Shame. I still believe CHNS has a great future and is significantly undervalued at 380p.

[crawford] 06/4/2011 17:48

zangdook / edmundshaw,
thanks, yes the brokers don't get a fee for this :-)

[edmundshaw] 06/4/2011 16:14

Right. No-one will get scaled back.

Tell that to the Halifax. I copied them the relevant parts of the RNS, but they don't listen. At first they implied that you could only get 34.1% of your shares taken up, it took 3 emails for them to change that tune. Sigh.

If I were cynical I might believe they wanted you to sell your shares instead, to get them the dealing costs and perhaps the difference to 385p. But it comes across more like denseness...