Speculation that it could be a potential acquisition target by a US healthcare firm based on US.
The US based firm is looking at Adventa to obtain exposure to the rubber glove sector for upstream integration of its healthcare business.
The US based firm had previously been in preliminary talks with Top Glove but had decided that Top Glove was too big a mfg which would be too expensive to purchase.
Sources say any buyout of Adventa will be done at a PER of 11 times multiple of FY2011’s forecast earnings … RM3.40.
Adventa - Not a firm grip on 4Q10 headwinds (CIMB)
At 82% of our forecast and 83% of consensus numbers, Adventa’s FY10/10 core net profit which excludes a RM7.6m one-off tax writeback was below expectations due to higher raw material costs and a weak US$. To our surprise, Adventa declared a first and final tax-exempt dividend of 7 sen, much higher than our 4 sen forecast, prompting us to raise our FY11-12 DPS estimates by 3.6-4.5 sen.
After accounting for higher latex cost and a weaker US$, we lower our FY11-12 EPS forecasts by 10-11%.
This reduces our target price from RM3.79 to RM3.14, pegged to an unchanged 10.2x CY11 P/E or a 30% discount to Top Glove’s target P/E of 14.5x.
We continue to rate Adventa an OUTPERFORM given the potential re-rating catalysts of 1) higher OBM glove sales, 2) establishment of own distribution channels, and 3) better product mix from higher nitrile sales.
BJToto confirmed that it had preliminary discussions within the company on a possible corporate exercise that may see the entry of a strategic investor. While there has been initial contact with several potential strategic investors, no negotiations have been conducted with any strategic investor at this juncture as internal discussions and planning are still ongoing.
BToto’s owner — Tan Sri Vincent Tan — has been buying back the company’s shares. Filings with Bursa Malaysia show that from end-July 2010 up until Dec 21 2010, Tan, through BToto’s holding company Berjaya Corp, has been acquiring the gaming company’s shares on the open market.
Tan had not disposed any of his stake in BToto during that period. Tan’s stake in the gaming company has increased to 53.63% or 717.37 million shares in a six-month time frame, from 680.2 million shares, or a 50.854% stake (direct and indirect), at the end of June 2010.
IRCB warrants exercise price is 25 sen.
Sunrise as of yesterday UEM Land has received 91.57% of Sunrise , the offer closes on 07/01/2011, suspension on 31/12/2010.