Templeton Rejects Boto Buyout Plan
8 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
Organisations in this story
Sign up for our free newsletter
Recommend Webb-site to a friend
Copyright & disclaimer, Privacy policy