DejavooThis may interest you in case you did not see on ALZ...

Dejavoo

This may interest you in case you did not see on ALZ thread.


AAZPB could be a good buy now!

Assume you buy at 40 and conversion to equity takes place in Oct 2010. If you sell the converted equity at 10% below VWAP, equivalent rate of return is 103% per annum. If they redeem for cash, rate of return is a bit higher. There is of course a risk that CapitaLand privatise and keep notes in market (just like Multiplex) but at a rate of 4.8% over bank bills, I think CapitaLand will eventually redeem (say October 2010);

Running yield is 21% per annum.










Asian leader CapitaLand has eyes for local Australand
Florence Chong | April 02, 2009

Article from: The Australian

LEADING Asian property group CapitaLand is believed to be investigating privatising Australian-listed property group Australand ahead of a debt repayment due in June, sources in Singapore say.

CapitaLand, which already owns 59.3 per cent of the Australian developer, has a war chest of $S6 billion ($5.7 billion) following last week's $S1.84 billion capital raising.

Sources in Singapore told The Australian that an opportunity to privatise Australand could arise when its $562 million of commercial mortgage-backed securities (CMBS) matured in June.

CapitaLand, with assets of almost $S26 billion, made a net profit of $S1.26 billion in the 2008 financial year.

"It is a possibility. CapitaLand has more than enough money in its kitty to buy out Australian shareholders," said one source.

Another analyst said: "The question was raised when CapitaLand management met analysts recently and the response was 'we'll consider all options'."

The head of equities research with a large broking firm said that when the CMBS matured, CapitaLand had the option of issuing a shareholder's loan using convertible notes which could be converted into equity later.

"The CMBS market is closed to new issues and Australand would have to seek a bank loan to replace the debt," said the researcher.

Several analysts, who asked to remain anonymous, told The Australian that most people recognised that Australand was trading at a big discount to book value.

They said the drop in its share price in the past six months had raised the issue of the Australian group's viability as a listed entity.

"Its shares are thinly traded," said an equity analyst with a Singapore firm. "The only reason for having a listed vehicle is access to capital, but this is not happening now. Instead, it depends on its parent for capital."

Other industry sources said CapitaLand "could do more deals" as a private company without having to seek shareholder approval or scrutiny.

Based on the yesterday's closing price of 26.5c, said the head of research, it would cost around $200 million to buy the remaining 40.7 per cent of the company.

"It could sweeten the deal to minority shareholders by offering a premium of 20-40 per cent to the unit price, which would cost $260-$300 million."

This would give CapitaLand a company with net tangible assets of 89c per unit for less than 40c a unit