Integrax - All are WINNERS!

Integrax

- All are

WINNERS!

Some of you might have been disappointed that there was no posting from me especially the Iast week of March. I managed to post one blog only last month as I normally would have posted two. The reason is because of the Integrax Berhad's issues, especially the last few days of the month.

My earlier blog : Sometimes Up, Sometimes Down was due for posting on the last few days in March. But events such as the late night announcement by Tenaga Nasional Berhad that it has secured over 50% shares of Integrax Berhad meant my pre-written blog had to be altered. Then as it was due to be posted the next evening, came the news that our "David" Amin has decided to throw in the towels and that also meant my just-altered blog must be re-written again to reflect the latest situation.

As I said, I needed time to digest all those successive nights of important announcement regarding the situation of Integrax.

So now, it is 100% clear that Tenaga - the "Goliath" has defeated minorities' hero Amin - the "David" in this battle for Integrax Berhad.

Investors must understand that right from the start, both had different agenda in this battle. While Tenaga's mission is to secure control or total control of Integrax (at all cost?), Amin's mission is to protect his and minorities' interest in getting a higher price.

From reports initially, Amin has argued that Integrax is worth at least RM5 per share and any offer price near to that would be pleasing music to the ears.

It was actually a battle of "buy from me at a higher price that is deemed good in my opinion" rather than "I wound not be selling to you at all at any price".

Interesting, valuation is always a sticky point to judge and argue. While Perak Corp Berhad's Independent Advisor values Integrax at RM3.25, Integrax's Independent Advisor values it at RM3.66.

If you are the offeror, having seen the first offer of RM2.75 rejected, you would surely revised it to RM3.25 rather than RM3.66. Unless of course, Perak Corp decided that they would sell their stakes to Tenaga at RM3.66 based on Integrax's valuation. If Perak Corp had done that, would Tenaga revise the price to RM3.66? That is a million ringgit question we all will never know.

Gracious in defeat, Encik Amin

There is a saying that if you think it can't be done in this way, then don't stand on the way of someone else who think it can be done.

Obviously Amin didn't see the same direction as the "new" boss Tenaga over the future direction of Integrax. As such, it would be very uncomfortable in the board's room when it comes to key decisions making. Amin would surely feel like a lonely ranger in there.

So as a gentleman, Amin makes the most honourable decision, that is selling all his stakes of 24.8% to Tenaga. Is Amin a loser in this Integrax episode? No, in my opinion, conceding defeat doesn't always means a person is a loser. In many situation, saying sorry or admitting an error or defeat does not mean you are the loser. In fact, you could be a winner for just admitting that!

From a financial point of view, Amin would be pocketing a cool RM240 Million plus! That is not a small amount of money. Amin also makes additional gains from his investment in Integrax when he was buying aggressively around RM2.75 to RM3.00 during the first offer of RM2.75 from Tenaga.

Tenaga crossed the 90% threshold!

Initially, I thought that the most Tenaga can win in this battle is management control of Integrax as Amin with his huge stakes would be the main stumbling block. But now that out of the blue unexpectedly with Amin's stakes in as well, Tenaga ended up with huge percentage of Integrax shares.

Tenaga has managed to secure more than 90% shares from all the shareholders, then the offer will become Mandatory Take Over for all. That means even if you refuse to go the stock broking company and sign the necessary document forms to transfer your shares, Tenaga will still be able to "track" you from the list and send you a check, whether you like it or not.

We must bear in mind that there are always hardcore "investors" who are daring enough to hold on to their shares even if Tenaga is to delist Integrax. These type of investors are those who believe that one day eventually, Integrax will be relisted back with a richer valuations or Integrax corporated in a merger excercise and listed in a different entity.

And I am not ashamed to admit that I am one of those! Truth is I did not even make the trip to the stock broking firm to sign the documents to sell my Integrax shares to Tenaga! And I believe I won't be alone!

Tenaga's closing date for the revised offer price of RM3.25 (of course to minus the 7.5 sen dividend paid out earlier) was April 13. Integrax was delisted on April 21, 2015.

All are WINNERS in the end!

As this saga of take over of Integrax came to an end, I must congratulate all investors as most are winners in the end.

Tenaga got what they want, Amin walked away with huge profits, other minorities groups example Perak Corp also pocketed huge gains and that also included all other shareholders who invested below the Revised Offer price of RM3.25.

Truly this is one good battle where all are WINNERS in the end! How nice if there are other future battles such as this. And there will always be. You have just got to be able to spot-on very early .... like me.

Profits from Integrax is ....

My total original amount for investing in Integrax is RM33,231.65.

Dividends received in year 2014 is RM900.00 (RM50 x 18,000 shares).

Dividends received in year 2015 is RM1350.00 (RM75 x 18,000 shares).

Compulsory acquitsition by Tenaga at RM3.175 x 18,000 shares is RM57,150.00.

Total to be received is RM59,400.00 (from Tenaga and two dividends).

Total to be received of RM59,400.00 to minus RM33,231.65 (original amount invested) shows a profit of RM26,168.35 or a return of around 78% for an investment less than two years.

Terima Kasih, Tenaga for this windfall.