On a rising tide
Jaya Holdings (S$0.63) was the subject of a takeover bid recently. We are of the view that it was a technical bid by the new controlling shareholder Cathay because it had to satisfy the rules of the Takeover Panel. As expected, the independent financial advisor Kim Eng had recommended minorities not to accept Cathay's offer. The takeover has since lapsed. As this poor sentiment dissipates, we expect the price of Jaya shares to quickly breach its book value of S$0.68 and next settle at least in the S$0.70s range. Following its restructuring, we have no issue with the fundamental prospects of the company and estimate its fair value to be substantially higher given the buoyant prospects of the oil and gas industry as well as the new builds in progress. Street estimates its RNAV to be north of S$1.00.