SC Global owner Simon Cheong has offered to buy out the remaining of the company shares at $1.80/share to take the company private. Though the deal is not absolute done as it requires him holding at least 90% then can privatize. The concern is where one of the substantial shareholder Wheelock Properties who is holding 16% agrees to it or not. Based on the offer price, Wheelock Porperties might not have any capital gain on it should it accept the offer.
However, that is not the concern. I am currently holding this stock bought in 2010 at average price of $1.52 in my Trading Portfolio. It is not in my Investment Portfolio as it didn't fulfill the requirement I set to be considered a long term investment stock. Trading Portfolio is for me to test out some investment strategy, putting a limited time frame in holding it and once reasonable profit achieve will sell if off. NAV for SC Global is around $1.56 and my initial testing objective was to purchase the stock at or below its NAV and let the market to test against the fundamental. With that offer at $1.80, including the dividend collected so far, this allows me to achieve a return of at least 20%. Not a bad testing in investment.
SC Global is the 4th stocks that I have since 1993 that went under privatization (PanMar, MMI and Robinson) and so all of them managed to result in capital gain. The latest test on SC Global further enhanced on my believe that value/fundamental investing couples with patience and persistence will eventually get you the reward. At the moment in my Trading Portfolio I still have some other stocks which I bought below their NAV and potentially could be a privatization target in the future too. One of them is Guocoleisure. Time will tell whether the value/fundamental concept will once again emerge as the ultimate winner.
