Last Thursday, Rowsley received the approval in-principle from SGX for its proposed acquisitions of RSP Group and the Vantage Bay site in Iskandar, and a 2-for-1 bonus issue of warrants. Management reports that it would dispatch a circular and convene an EGM to seek shareholder approval in due course. We note that, on 2 Aug 2013, management announced that “barring unforeseen circumstances, the deal should complete in the second half of 2013 after regulatory and shareholders’ approval.” In our research piece, we carry out an analysis of Rowsley’s value under a successful RTO scenario, and also under a failed RTO scenario. If Rowsley’s proposed deal fails, we value each existing Rowsley share at approximately S$0.034 – its book value per share as at end Jun 2013. However, if the deal succeeds, we calculate from our analysis a value of S$0.67 to S$0.85 for each existing Rowsley share (before the 2-for-1 warrant issue ex-date).
Rowsley is in the midst of a reverse takeover (RTO) exercise that would transform it into a real estate player.
It proposes to acquire RSP Architects Planners & Engineers Ltd. (RSP Group), a leading architectural firm in Singapore, and a 9.23-hectare waterfront land site (Vantage Bay) in Iskandar Malaysia. After these acquisitions, existing Rowsley shareholders would receive two free bonus warrants (exercise price of S$0.18) for every share.
After completing the deal, major shareholders of Rowsley would include well-known businessman Peter Lim (38.73%) and RSP Group Chairman Albert Hong (12.21%).
On last Thursday, Rowsley reported that it has received approval in-principle from the SGX for the proposed deal, and will dispatch a circular and convene an EGM in due course. We also note that, on 2 Aug 2013, management announced that “barring unforeseen circumstances, the deal should complete in the second half of 2013 after regulatory and shareholders’ approval.”
In this research piece, we carry out an analysis of Rowsley’s value under a successful RTO scenario, and also under a failed RTO scenario. If Rowsley’s proposed deal fails, we value each existing Rowsley share at approximately S$0.034 – its book value per share as at end June 2013. However, if the deal succeeds, we calculate from our analysis a value of S$0.67 to S$0.85 for each existing Rowsley share (before the 2-for-1 warrant issue ex-date).
It proposes to acquire RSP Architects Planners & Engineers Ltd. (RSP Group), a leading architectural firm in Singapore, and a 9.23-hectare waterfront land site (Vantage Bay) in Iskandar Malaysia. After these acquisitions, existing Rowsley shareholders would receive two free bonus warrants (exercise price of S$0.18) for every share.
After completing the deal, major shareholders of Rowsley would include well-known businessman Peter Lim (38.73%) and RSP Group Chairman Albert Hong (12.21%).
On last Thursday, Rowsley reported that it has received approval in-principle from the SGX for the proposed deal, and will dispatch a circular and convene an EGM in due course. We also note that, on 2 Aug 2013, management announced that “barring unforeseen circumstances, the deal should complete in the second half of 2013 after regulatory and shareholders’ approval.”
In this research piece, we carry out an analysis of Rowsley’s value under a successful RTO scenario, and also under a failed RTO scenario. If Rowsley’s proposed deal fails, we value each existing Rowsley share at approximately S$0.034 – its book value per share as at end June 2013. However, if the deal succeeds, we calculate from our analysis a value of S$0.67 to S$0.85 for each existing Rowsley share (before the 2-for-1 warrant issue ex-date).
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