According to a group of long-term shareholders, the SOA offer still values Isetan below its intrinsic value. The reason is that Isetan adopts historical cost accounting (like City Developments). Its properties are valued at cost, with less depreciation and impairment. As a result, the valuation of its investment properties and its property, plant and equipment (PPE) are likely to be less than what they could receive on the open market.
On April 1, Isetan (Singapore) announced that it had received an of[1]fer from Isetan Mitsukoshi Holdings to acquire the shares that the latter doesn’t own through a scheme of arrangement (SOA). The price being offered is $7.20. The undisturbed price of Isetan on March 26 was $2.84 versus its book net as[1]set value (NAV) of $2.58. Often, Isetan would trade below its book value.
Why did Isetan Mitsukoshi, which owns 52.73% of Isetan (Singapore), offer $7.20 per share?
