WBL Corporation Limited

WBL Corpoartion Limited

I bought WBL Corporation Limited at $2.83 on 4 January 2012. Subsequently, I received $0.50 dividend per share three times over the holding period. I sold at $4.17 today. Consequently, we earn approximately 50.13% profit taking account of the transaction cost.

However, I did not to maximise the profit by selling the 52-week high because I believed that the company is worth much more than the total market capitalization. 

Few articles I wrote were an attempt to educate ill-informed or unknowledgeable minority and passive ordinary shareholders. It failed because STC and UE choose not to increase the offer price. STC is more gracious that it will just hold its current holding on WBL while sticking to the takeover code. On the other hand, UE is not so gracious, more like rough gentleman telling us to sell immediately lest the share price drop due to the tightening local car market. The latter is the first half of the trigger point.

Minority and passive shareholders are getting less and less motivated to hold and began to sell at lower price. It is really wrong move for them, if this is the case taking its place. STC was so smart that it used its subsidiaries to buy 1% of outstanding WBL shares available (I believe per subsidiary) in the market at lower open market price. At the same time, STC was buying warrants to maintain the total holdings of WBL shares. It is because UE’s warrants conversion dilutes the STC’s percentage holding. Yesterday, UE made a public official announcement that it will extend the deadline to buy WBL shares. Clearly, it wants to buy shares openly which it has demonstrate during the last few days. These actions are the other half of the trigger point. That is where I did not consider in the last article.

Post-analaysis after my Sale of WBL Corporation Limited Share

I was stunned that STC decided to sell whole stake in WBL to UE. It spells one good news and one bad news. Starting with good news, STC will have a lot of cash and cash equivalent from the sale of WBL shares and monetising its hospitality division by exchanging physical hospitality assets for shares in joint venture between STC and Far East. It is not known whether it is willing to pay special dividend as it has done few years ago back. This demonstrate that STC is excellent at creating positive wealth without affecting itself badly. If I were top management, I would have done the same given the current set of total assets STC has.

Bad news is that STC's chairman's reputation may be dented abit. It is because she once said that STC would hold on WBL stake no matter what happen.

It is quite expected that UE would increase its offer price again but I didn't know when. Thus my patience is too thin. If i were be that patient, i would have sold at 2nd highest share price (next to 52-week high share price).