The largest institutional
investor in Hong Kong stocks, Templeton, has announced its opposition to
the Boto MBO proposal and urged all other shareholders, large and small to
vote against the deal. |
Templeton Rejects Boto Buyout Plan
8th April 2002
Templeton, the largest institutional investor in the Hong Kong
market and headed by well-known value investor and corporate governance advocate
Dr Mark Mobius, has announced its opposition to the Boto
MBO. In a statement issued today, they wrote:
"The Templeton Strategic Emerging Markets Fund LDC, the private equity
vehicle of the Templeton Emerging Markets Group, opposes the proposed plan to
extract the most valuable parts of Hong Kong-listed Boto International and
place them into a private company in which current Boto management will
participate."
Mark Mobius, Director of the Fund, said:
"We hope that all current shareholders realize the potential and value
of Boto's artificial Christmas tree and outdoor furniture
businesses. Both of these businesses have been growing at a healthy
pace. Our recent research in the U.S. market indicates that the expected
slowdown of orders from large retailers is not materializing and business
outlook should be good for Boto. We especially like the outdoor furniture
business and its growth potential."
He continued:
"As current shareholders we hope that these core businesses remain
part of the listed entity going forward. We urge other shareholders, large and
small, to vote against this transaction. We also urge the Boto directors and
management to reject this proposal."
Commenting on the support, David Webb, Editor of Webb-site.com, said:
"The public statement by Templeton and widespread opposition from
other investors, both institutional and retail, should make it clear to both
Carlyle and Boto's board that this proposal faces defeat in the meeting of
minority shareholders. I have not heard from a single minority shareowner who
supports the MBO.
The simple fact is that Boto has a great core business at a very low
valuation, and investors want to stay with it and enjoy its continued growth.
It would be a waste of company resources to proceed further with this proposal
on its current terms. If management really wants to privatise this company and
receive all the benefits of its future growth, then they should make a full
general offer at a price which reflects its inherent value."
© Webb-site.com, 2002
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