Daily Brief Singapore: Sea , Golden Energy & Resources and more

In today’s briefing:

Sea (SE US) – Into the Looking Glass
Golden Energy: IFA Says Fair & Reasonable. It Is Neither
Golden Energy (GER SP): Art of the Lie as the IFA Says Offer Is Fair and Reasonable

Sea (SE US) – Into the Looking Glass

Sea Ltd’s 1Q2023 results showed its ability to sustain profitable growth with a vibrant performance from e-commerce and fintech, offset by slower digital entertainment but with visible stabilisation.
E-Commerce showed strong performance in Asia, with Brazil making significant progress towards profitability, whilst digital financial services were boosted by a sizable loan book and more diversified funding costs.
Sea Ltd continues to demonstrate its cost leadership and ability to expand its total addressable market while sustaining profitability through better infrastructure and user experience rather than pure promotional spending.

Responding to SIAS and the SGX, the Widjaja Family revised terms such that Golden Energy (GER SP) shareholders opting for an all-cash payout would receive S$0.973/share, up from S$0.846/share.
The Offer remains low-balled. The Offer should include a similar in-specie of the Stanmore Coal (SMR AU) stake together with a cash-out option. This is the most transparent approach.
The Circular is out and the IFA reckons the Offer is fair & reasonable – despite a fair value of S$0.574/share for Stanmore versus the Exit Offer of A$0.181/share.

The IFA has concluded that the Widjaja family’s offer for Golden Energy & Resources (GER SP) is fair and reasonable. The EGM will be held on 9 June.
The IFA has justified its conclusion based on a convoluted methodology that has serious flaws. A fairer SOTP valuation is 37% higher than the IFA’s SOTP valuation range.
Notably, Dian Swastatika Sentosa (DSSA IJ) will abstain from voting on both resolutions. While the prospect of a bump is diminishing, the offeror is yet to declare the offer final.

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