STEng – BT

ST Engg offer to Nera good for all: DMG analysts

THE offer by Singapore Technologies Engineering (ST Engg) to take Nera Telecommunications private is – according to DMG & Partners Research – a positive move for both companies and their shareholders.

In a report released yesterday, Edison Chen and Terence Wong of DMG said that ‘the valuation is fair and (Nera) shareholders should accept the offer’.

Calling it a win-win outcome, the analysts said: ‘The acquisition allows (ST Engg’s electronics arm) to leverage Nera’s in-depth expertise in system integration in the fields of both telecommunications and info-communications, to enhance its existing business in terrestrial and wireless broadband networks.’

‘On the other hand, shareholders of Nera can also monetise their investments with an offer price that is equivalent to 12.1x FY2011 price-to-earnings (8.6 ex-cash), and is around our intrinsic value estimates of 47 cents per share.’

Late last Friday night, ST Engg announced the move to acquire Nera by way of a scheme of arrangement. If successful, the move will see the generally thinly-traded Nera delisted from the Singapore Exchange (SGX) mainboard.

Nera shareholders stand to receive an aggregate cash amount of 45 cents per share, comprising 6 cents to be paid by Nera as a cash dividend, and 39 cents to be paid by ST Engg. The acquisition consideration, excluding the dividend, is $141.1 million.

Said the analysts: ‘Since we put up a ‘buy’ recommendation for Nera back in October 2011, the share price has surged 43 per cent, surpassing our target price of 47 cents. The offer price may be lower than the last traded, but this is largely due to investors playing up the shares of what was once a quiet stock.’

ST Engg said separately yesterday that its marine arm has won two shipbuilding contracts worth about $75 million from a wholly owned subsidiary of Swire Pacific. It also announced that wholly-owned ST Electronics (Info-Comm Systems) has acquired a further 2.77 per cent stake in Telematics Wireless for US$1.1 million.

Nera’s share price fell 11 per cent to close trading at 44.5 cents yesterday. ST Engg closed 0.33 per cent higher at $3.

STEng – BT

ST Engg offer to Nera good for all: DMG analysts

THE offer by Singapore Technologies Engineering (ST Engg) to take Nera Telecommunications private is – according to DMG & Partners Research – a positive move for both companies and their shareholders.

In a report released yesterday, Edison Chen and Terence Wong of DMG said that ‘the valuation is fair and (Nera) shareholders should accept the offer’.

Calling it a win-win outcome, the analysts said: ‘The acquisition allows (ST Engg’s electronics arm) to leverage Nera’s in-depth expertise in system integration in the fields of both telecommunications and info-communications, to enhance its existing business in terrestrial and wireless broadband networks.’

‘On the other hand, shareholders of Nera can also monetise their investments with an offer price that is equivalent to 12.1x FY2011 price-to-earnings (8.6 ex-cash), and is around our intrinsic value estimates of 47 cents per share.’

Late last Friday night, ST Engg announced the move to acquire Nera by way of a scheme of arrangement. If successful, the move will see the generally thinly-traded Nera delisted from the Singapore Exchange (SGX) mainboard.

Nera shareholders stand to receive an aggregate cash amount of 45 cents per share, comprising 6 cents to be paid by Nera as a cash dividend, and 39 cents to be paid by ST Engg. The acquisition consideration, excluding the dividend, is $141.1 million.

Said the analysts: ‘Since we put up a ‘buy’ recommendation for Nera back in October 2011, the share price has surged 43 per cent, surpassing our target price of 47 cents. The offer price may be lower than the last traded, but this is largely due to investors playing up the shares of what was once a quiet stock.’

ST Engg said separately yesterday that its marine arm has won two shipbuilding contracts worth about $75 million from a wholly owned subsidiary of Swire Pacific. It also announced that wholly-owned ST Electronics (Info-Comm Systems) has acquired a further 2.77 per cent stake in Telematics Wireless for US$1.1 million.

Nera’s share price fell 11 per cent to close trading at 44.5 cents yesterday. ST Engg closed 0.33 per cent higher at $3.

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