How is HOV only at Rs 105?

Am I missing something here !

How is HOV Services only at Rs 105 ?

On  June 7,2008 it was on a 20% Upper circuit at Rs 120.45  and on June 10,2008 hit a 10% upper circuit at Rs 132.45 before reacting………All of this movement was on announcement of great results and an offer of US $ 202 million for it’s wholly owned subsidiary HOV Services LLC,and it’s Hong Kong Subsidiary…This offer is being considered and if approved will give HOV Shareholders an option to take cash of US $ 91 million or  Rs 170/share or One share in buyers company for every share held in HOV…They will continue to retain original share in HOV !

Does not this mean you buy HOV at Rs 105 today and get Rs 170 in cash back from them on approval and closure of the sell off of some of their subsidiaries to the promoters controlled company itself ! and get to retain the original share you bought too!?   

 

HOV came out with an issue in September 2006 at Rs 10 + Rs 190 =Rs 200 which was oversubscribed twice in the retail segment and thrice in QIB segment

 

The Company has earned a consolidated Rs 82 crs  before Minority Interest (MI) and Rs 54 crs after MI on Income of Rs 907 crs for ye March 31,2008 showing a strong EPS of Rs 43 (after MI)on Capital of Rs 12.50 crs ( FV Rs 10)

 

 

 

Important Questions to ask

 

  • What is the Valuation of HOV Services LLC and the Hong Kong Subsidiary and have adequate disclosure been made to HOV Shareholders on order book positions etc as the offer has come from a company controlled by the promoters and  some shareholders of HOV in other words is US $ 202 Million too less?

 

  • Full Disclosure should be made of the Names and shareholdings of all promoters and shareholders who are common to both HOV and the Company making the offer…this will reveal as to how much of the US $ 202 million will be returned to them at Rs 170/share of their holding in HOV

 

  • What is the Income and Profit contribution of the Subsidiaries for which offer received in the Consolidated Accounts ?

 

  • If Subsidiaries are sold what will parent HOV Services do as virtually all business is in subsidiaries?

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