HI Time to Vote
16 December 2002
The circular regarding the proposed privatisation of Henderson Investment Ltd (HI, 0097) was posted on 6-Dec-02. It contains no information to change our view that this deal is unfair and unreasonable, and should be voted down by independent shareholders.
Of course, the "Independent Financial Adviser" has called it "fair and reasonable" and recommended shareholders to vote in favour, but long-time readers of Webb-site.com will know that only once in about 10 years has an IFA gone against management and advised shareholders to reject a management proposal. The system simply doesn't work and we have called for reform in the past.
Going against management is hardly a way to win business as an IFA. Indeed, this same IFA, Platinum Securities, has simultaneously called the current privatisation offer for Paul Y - ITC "fair and reasonable" and said that shareholders should accept it, even though it is priced at a 90% discount to net asset value. You have to wonder what discount they would regard as sufficient to make an offer unfair - 100% perhaps?
We could provide you with a detailed dissection of Platinum's advice letter, but that would be giving it too much credence. Enough said. What shareholders now need to decide is whether they are willing to part with HI at $7.60 per share when its underlying assets are worth over $12, and forego the upside of a recovery in the property market and future investments in the mainland China gas supply business.
Don't miss the voting cut-off
It would be difficult to devise a more complicated voting timetable if one tried. The shareholders' meeting to decide on the deal is at 11:00 on Thu-2-Jan-03, the first working day of the new year. However, proxy forms must arrive by 11:00 on Tue-31-Dec-02, two days earlier. That means that the Central Clearing and Automated Settlement System (CCASS) has set a voting deadline for its participants of 15:45 (HK time) on Fri-27-Dec-02, to give it time to fill in the proxy form for all the public shares it represents.
However, most investors do not hold shares directly in CCASS but hold them through a broker, bank or custodian, and they will set earlier deadlines (usually at least 1 day earlier) based on the time it takes them to aggregate their clients' voting instructions and input them to their CCASS terminal. Due to the Christmas and Boxing day holidays and the fact that Christmas Eve is usually a half-day session, many custodians may set a deadline of THIS FRIDAY, 20-Dec-02 (HK time) or earlier. If you are reading this in London or New York, that means THURSDAY 19-Dec-02.
Every vote counts (ask Al Gore), because this meeting takes place on a poll, 1 share, 1 vote, not a show of hands. So don't leave it until the last minute. Send in your votes today, and get confirmation from your bank, broker or custodian that your shares will be voted. If you have any questions on general voting procedure for HK-listed companies, consult our voting guide, which is provided without liability.
A note to the bewildered
Several overseas institutions have called us in some confusion about what this vote means. This is not a general offer or tender offer. It is an all-or-nothing deal. The vote is on whether to approve the privatisation offer, which would be binding on all shareholders. If you vote against the deal, but the meeting approves it, then your shares will still be acquired at the same price per share as every other shareholder. There is no connection between voting and payment.
© Webb-site.com, 2002
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