Japan Land Cash Offer too low?

With the advice from its independent financial adviser, JAPAN Land has urged its shareholders to reject the takeover offer by tycoon Oei Hong Leong as 'there are insufficient compelling reasons to accept the offers and the options proposal'.
Based on the report, the evaluation of the offer seems to focus on the NTA and revalued NTA.

Current audited NTA per share is 56 cents as at March 31.

NTA is 66 cents per share when factoring in gains from the sale of a 48% stake in KHC Ltd which was completed in April.

Estimated NTA is 72 cents per share if the share swap between its 14.13% associate Japan Asia Holdings Japan (JAHJ) and Jasdaq-listed ATL Systems goes through.


Revalued NTA of 69-71 cents per share if TSE trades at 14.79 times PE upon listing (if it listing go throught)

Revalued NTA per share of 72-76 cents if TSE trades at higher PE of 26.98 times.

What Oei put on table is 60 cents per share. Do not bite, shareholders are advised!

The job of the advisor is much easier then general perception if the scope of work is just to sum up the NTA figure and do the arithmetic calculation to derive the conclusion.

The fact that Japan Land is trading below 60 cents prior to the cash offer and rumors is ignored.

The fact that a lot of company in stock exchange trading below NTA is ignored.

The fact that the market valuation is getting cheaper since the offer is made is ignored.

The business prospect and challenge of Japan Land is ignored.

When the offered expired or lapsed, we will probably see how Japan Land cross the 60 cents marks again.