Jumbo Group

[dreamybear]

Re Jumbo's OFF-MARKET EQUAL ACCESS SHARE BUYBACK OFFER of $0.26 a share. Can't imagine anyone could be interested in such a low offer? Especially when  it's prospects have improved lately. Pleased to hear from forumers.

So the EAO price is below the market price and 37m shares accepted the EAO. Am I missing something or is it to be expected in our market(e.g. liquidity issues?) ?

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https://www.businesstimes.com.sg/compani...-s026-each (emphasis added)
".... the food and beverage player said that it will offer S$0.26 in cash per share to buy back up to 10 per cent of the company’s 643,658,465 shares in issue. 

The offer represents a 6.1 per cent discount to the average market price of the company’s shares over the last five market days before the offer was announced....

For the year ended Sep 30, 2023, the company posted a net profit of S$14.6 million, reversing a net loss of S$91,000 over the same period a year earlier.....

Shares of Jumbo closed up 1.8 per cent or S$0.005 to S$0.28 on Friday, before the announcement was made."

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https://links.sgx.com/FileOpen/Jumbo_Res...eID=791060
"... total number of Shares to be purchased pursuant to the Equal Access Offer is 37,522,422 Shares, representing 58.5% of the Maximum Buyback Amount available under the Equal Access Offer (“Total Tendered Shares”)..."

[weijian]

Re Jumbo's OFF-MARKET EQUAL ACCESS SHARE BUYBACK OFFER of $0.26 a share. Can't imagine anyone could be interested in such a low offer? Especially when  it's prospects have improved lately. Pleased to hear from forumers.

So the EAO price is below the market price and 37m shares accepted the EAO. Am I missing something or is it to be expected in our market(e.g. liquidity issues?) ?

------------

https://www.businesstimes.com.sg/compani...-s026-each (emphasis added)
".... the food and beverage player said that it will offer S$0.26 in cash per share to buy back up to 10 per cent of the company’s 643,658,465 shares in issue. 

The offer represents a 6.1 per cent discount to the average market price of the company’s shares over the last five market days before the offer was announced....

For the year ended Sep 30, 2023, the company posted a net profit of S$14.6 million, reversing a net loss of S$91,000 over the same period a year earlier.....

Shares of Jumbo closed up 1.8 per cent or S$0.005 to S$0.28 on Friday, before the announcement was made."

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https://links.sgx.com/FileOpen/Jumbo_Res...eID=791060
"... total number of Shares to be purchased pursuant to the Equal Access Offer is 37,522,422 Shares, representing 58.5% of the Maximum Buyback Amount available under the Equal Access Offer (“Total Tendered Shares”)..."

hi dreamybear,
Based on Jumbo Group's AR23 shareholder statistics (AR23) updated till Dec2023, there are 4 different substantial shareholders holding a total of ~69% of the company.

Since 58.5% tendered, it means there are definitely some in the 4 substantial shareholders who tendered their shares. So with these results, it probably becomes clearer now - High chance that some in that group of 4 wants to sell, but the remaining in the group are not willing to purchase it from their own pocket. And probably due to liquidity issues, EAO would be the best (and cheapest) way to ensure OPMIs don't get affected by any volatility in share price movements. After all, we OPMIs are much more affected by daily share price movements than anyone else.

[Shiyi]

The acceptance is 58.5% of the Maximum Buyback Amount. It works out to only 5.85% of the total share capital. Don't understand how you come to the conclusion that the acceptance comes from one of the 4 substantial shareholders?

[weijian]

Hi Shiyi,

Under this 10% EAO, every shareholder can only tender a maximum 10% of their holdings. Of course, shareholders can actually tender in excess of 10% but the eventual maximum acceptance will just be 10% of total shares (ie. Maximum Buyback Amount). If other shareholders do not tender, then such excesses will be considered to backfill to 10%.

Since the offer price is below market price, there is already a low chance OPMIs will tender their 10%, what more in excess. So the probable conclusion is that this is an exercise for at least 1 of the 4 majority shareholders. Of course, I could be totally wrong and so let's wait to see if there is a change in holdings announcement to come.

[Shiyi]

Hi Shiyi,

Under this 10% EAO, every shareholder can only tender a maximum 10% of their holdings. Of course, shareholders can actually tender in excess of 10% but the eventual maximum acceptance will just be 10% of total shares (ie. Maximum Buyback Amount). If other shareholders do not tender, then such excesses will be considered to backfill to 10%.

Since the offer price is below market price, there is already a low chance OPMIs will tender their 10%, what more in excess. So the probable conclusion is that this is an exercise for at least 1 of the 4 majority shareholders. Of course, I could be totally wrong and so let's wait to see if there is a change in holdings announcement to come.

Hi Weijian,
You are spot on. One of the majority shareholders Ron Sim sold part of his stake.
He still keeps some. Interesting to know what is his game plan.

[weijian]

IMHO, Jumbo Group is one of the better managed F&B brands in Spore. The past few years of escalating operating costs has already (and will be) accelerated the "creative destruction" of many F&B brands on the local scene. But somehow, Jumbo Group's core business is relatively resilient and I suspect may continue to strive despite the well publicized entry of many overseas dining concepts.

When I look at Jumbo Group's brands on its website - the word heritage stands out. Chilli crab and bak ku teh are arguably Spore heritage dishes (many Msians might disagree though but its flagship chilli crab is undisputedly Lion City born). While foreign F&B operators may have superior supply chain, vast financial resources or new concepts, it is not easy to replicate heritage. As for some of Jumbo Group's franchise/JV - cha chaan teng and Peking duck - it also works with the heritage brand owners of origin to bring them to a more cosmopolitan Spore to expose to her more diverse palate.

MINUTES OF ANNUAL GENERAL MEETING

Question (15) Is the Group expanding its other brands because Jumbo Seafood had matured and needed diversification and whether all the Group’s brands were profitable, or if most of the profits were coming mainly from Jumbo Seafood.

Reply The Chairman clarified that Jumbo Seafood is not yet fully saturated in Singapore. The Group also operates a range of concepts, from casual to premium, allowing it to cater to different customer segments. In addition, the Chairman emphasized the Group’s plans to continue growing across tourist, local and fine‑dining markets. With Singapore attracting more affluent visitors, the management see strong potential to expand premium seafood and Cantonese dining concepts. Overall, the management believe there are still significant market opportunities and that the Group is hoping to capture further growth.

https://links.sgx.com/FileOpen/JBGL%20-%...eID=875968