Any info on ODEL?

Dileepa · 26 Re: Any info on ODEL? Fri Jul 27, 2012 3:36 am

Dileepa

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Things unraveling will be beautiful to watch.
Otara & family is holding : 83%
Dr. Senthilverl is holding : 5.5%
Rest of us : 11.5 %

After the big sale to Parkson it will be,
Parkson : 41%
Family : 41%
Dr. : 5.5%
Rest : 11.5 %

At the right issue some will sell to Parkson (i.e price will come down to Rs.23.5/=)
As the family members are utilizing the rights at full, Dr. actions will be interesting to watch.

In a what if scenario,
If Dr. also utilize his rights, Family + Dr will hold 46.5%
Parkson : (41+x)% , Rest : (11.5-x)%
I think that x will be less than 5%/. Also Dr. may have up his stake when it fell to 17 level.
He bought this @ 30, so he have a good margin to average.
In that case Parkson will not get the control they hope to do so.
Also after the sale to Parkson family & other related parties may
buy more of this (i.e price might go higher than mandatory offer price)

Things to consider,
・If Parkson could not get the real control, will they push up the offer price?
・Parkson may have already bought some bellow Rs.23.5/=
・Parkson may have come to a deal with Dr. to gain the full control
・As they need to take the profit abroad, they might go for a massive dividend payout (higher than Rs.1.0/=)
・Do they need the real control at the first place?
・What will be the net asset value/share in Sep. report. Will it jump over 16 i.e (12.1+20)/2

aj · 27 Re: Any info on ODEL? Fri Jul 27, 2012 8:21 am

aj

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Why the hell did the owner sell like that? If I were the owner if I really want to sell some, I would keep 51%. Why would they sell like that to get into a uncomfortable situation. Is ODEL in a bad financial state?

econ · 28 Re: Any info on ODEL? Fri Jul 27, 2012 8:38 am

econ

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I think otara wants ODEL brand to become international famous brand.

aj · 29 Re: Any info on ODEL? Fri Jul 27, 2012 9:03 am

aj

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econ wrote:I think otara wants ODEL brand to become international famous brand.

I doubt that. If the Parkson or whatever takes control of it, they'll dump the ODEL name and use their own brand. Then ODEL will be no more. So much for proud Sri Lankan brand then. Smile

Antonym · 30 Re: Any info on ODEL? Fri Jul 27, 2012 9:47 am

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aj wrote:

econ wrote:I think otara wants ODEL brand to become international famous brand.

I doubt that. If the Parkson or whatever takes control of it, they'll dump the ODEL name and use their own brand. Then ODEL will be no more. So much for proud Sri Lankan brand then.

ODEL's attraction is that, as a brand and a destination store, it is distinctly Sri Lankan.
It is unlikely that Parkson will dump the name.

Jiggysaurus · 31 Re: Any info on ODEL? Fri Jul 27, 2012 9:47 am

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aj wrote:Why the hell did the owner sell like that? If I were the owner if I really want to sell some, I would keep 51%. Why would they sell like that to get into a uncomfortable situation. Is ODEL in a bad financial state?

Why is it so hard to understand? The owner started the business from the boot of her car with Rs 5000, today she's selling half of the business for Rs 1,400,000,000. All of that is getting re-invested back into the business in the rights issue. (Obviously she didn't have money to massively expand the business which is why 40% of ODEL is getting sold to Parkson and the roundabout rights issue)
So the girl who started a business in her car will be owning 40% (with her brothers) of a Rs 5,500,000,000 business in partnership with an international retail chain. That looks like a Sri-Lankan success story.

When people are negative all the time they see the glass as always half empty.

seek · 32 Re: Any info on ODEL? Fri Jul 27, 2012 10:10 am

seek

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Another right issue at wrong time for minor share holders? Is this right issue price is attractive? ODEL price will come down to below 20 very quickly.

Anyway, this will not be a big problem for the objective of the right issue as the Parkson and Otara family have committed to fully entitlement of the right issue which is almost 80% of the total capital that is expected to be raised.

Anyway, I see this right issue as a good move for achieving the mandatory offer. We have to see the Dr’s reaction.

anubis · 33 Re: Any info on ODEL? Fri Jul 27, 2012 12:04 pm

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I don't understand why this share is trading below 23.50... since the mandatory offer is at that level.... any ideas?

Cheers!

zenobia · 34 Re: Any info on ODEL? Fri Jul 27, 2012 1:13 pm

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if this is a mandatory offer by parksons, they have to offer to buy at the highest price the share has had during recent past (i cant remember the period) if you look at the price chart of odel, during last two weeks it has had prices in the range of 27 rupees. so the parksons have to offer to buy around 27 rupees? please correct me if i am wrong.

Chinwi · 35 Re: Any info on ODEL? Fri Jul 27, 2012 2:09 pm

Chinwi

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zenobia wrote:if this is a mandatory offer by parksons, they have to offer to buy at the highest price the share has had during recent past (i cant remember the period) if you look at the price chart of odel, during last two weeks it has had prices in the range of 27 rupees. so the parksons have to offer to buy around 27 rupees? please correct me if i am wrong.

It should be the Highest price paid by the Particular buyer during last 6 months.
The highest they paid was 23.50.

It was trading around 30 in January.
Then came down sharply to 19/- in mid February.
I do not know someone did this purposely or not. (to collect as he was aware of this deal. )

During Feb and June it once came to 23.50 but never broke that magical figure.

anubis wrote:I don't understand why this share is trading below 23.50... since the mandatory offer is at that level.... any ideas?

What you can get max is 23.50 in a future date. It is better to sell little below now and invest somewhere else. (time factor, opportunity... etc)

anubis · 36 Re: Any info on ODEL? Fri Jul 27, 2012 3:03 pm

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@Chinwi: thank you for the explanation!

So, if I buy some around 22Rs, I'll be able to sell at the mandatory offer for 23.50? sounds like a not-so-bad deal to me... :-/

Cheers!

WildBear · 37 Re: Any info on ODEL? Fri Jul 27, 2012 3:05 pm

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Jiggysaurus wrote:

aj wrote:Why the hell did the owner sell like that? If I were the owner if I really want to sell some, I would keep 51%. Why would they sell like that to get into a uncomfortable situation. Is ODEL in a bad financial state?

Why is it so hard to understand? The owner started the business from the boot of her car with Rs 5000, today she's selling half of the business for Rs 1,400,000,000. All of that is getting re-invested back into the business in the rights issue. (Obviously she didn't have money to massively expand the business which is why 40% of ODEL is getting sold to Parkson and the roundabout rights issue)
So the girl who started a business in her car will be owning 40% (with her brothers) of a Rs 5,500,000,000 business in partnership with an international retail chain. That looks like a Sri-Lankan success story.

When people are negative all the time they see the glass as always half empty.

Good reply,spot on

seek · 38 Re: Any info on ODEL? Fri Jul 27, 2012 5:11 pm

seek

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I think the best option is to sell ODEL now and reinvest again after sometime since the company is in a transition period. Who knows, we may able to buy this below 10/= after sometime from the right conversion.

aj · 39 Re: Any info on ODEL? Fri Jul 27, 2012 7:18 pm

aj

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I still couldn't understand this. The owner has relinquished the 51%. Now it's like half and half. That means the new owners could very easily take the 51% because the rest is with some high net worth person.
What that means is that the Parks could fire the founder in the future, tell her to go home and she would have no power to refuse. This kind of thing has happened a lot in the world. Take Steve Jobs. If she doesn't have the 51% the company could fire her from the top job.

Jiggysaurus · 40 Re: Any info on ODEL? Sat Jul 28, 2012 9:04 am

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aj wrote:I still couldn't understand this.

Maybe they'll re-carpet the road in front of Odel. You can take some time to analyse that.

http://forum.srilankaequity.com/t20648-delusional-memory-and-negativity#128501

Dileepa · 41 Re: Any info on ODEL? Sat Jul 28, 2012 10:51 am

Dileepa

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seek wrote:I think the best option is to sell ODEL now and reinvest again after sometime since the company is in a transition period. Who knows, we may able to buy this below 10/= after sometime from the right conversion.

I don't think this will go bellow Rs.20/=.
Current market free float is less than 12% of the issued capital.
After the mandatory issue, market free float will be around 5% I believe.
In normal trade, average trade volume is than 10K.
Of course the price will stagnate around 21 for some time.
But with the new management & market opportunities,
ODEL will be more profitable in future.

So far, ODEL was very ethical in business.
No private placement before IPO, and after this
every body will be in the same boat including directors @ around Rs.21/=.
To be more specific, Parkson's cost will be Rs.21.75/= after the drama (Dr. was around 30/=).

Current EPS is nearly 1.50/=. There is a high chance that they will give a higher dividend (at about Rs.1/=).
Earlier they were giving just 50 Cents, because Otara didn't want to take out the profit.
Literally it was her money in the company's account.
Now the things are different & they will have to take out profits.
Keep in mind, RICH declared a 30 Cents dividend for the last quarter ended 31st March
when the EPS for the quarter was 25 Cents. Same thing could happen here.

I would say, there is a fair chance that this will hit 25 within next 6 Months.
Question is, is it worth to keep your money here?
If the market booms there will be counters which are more attractive than this.
If it doesn't this will be a good,solid & safe investment.