New York (ots/PRNewswire) - Paulson & Co., Inc. announced today
that it has sent the following letter to the Board of Directors of
Neptune Orient Lines Limited:
Mr. Cheng Wai Keung
Neptune Orient Lines Limited
456 Alexandria Road
NOL Building #06-00
Dear Mr. Keung,
We are a New York-based money management firm focusing on special
situations on a global basis. As of September 1, 2004, we owned
87,422,000 shares in Neptune Orient Lines ("NOL"), representing 6.05%
of the shares outstanding. We purchased the stock because we are
attracted by the low valuation and strong financial performance of
While the Temasek S$2.80 offer for NOL represents a premium to
where the Company's shares had previously traded, we believe it is
significantly less than what NOL would receive in an open auction
process. According to HSBC, the financial advisor to the independent
directors of NOL, the S$2.80 offer values NOL at an enterprise value
multiple of only 3.2x LTM EBITDA, as compared to an average of 5.6x
for similar completed transactions in the industry, or more than a
40% discount to precedent transaction multiples. Similarly, the
multiple offered is 50% less than the average of 6.7x for the
industry publicly traded comparables, as computed by HSBC.
Furthermore, due to NOL's strong current growth in earnings, with
second quarter 2004 EBITDA up 44% from the previous year, research
analysts estimated in a recent report that Temasek's S$2.80 offer
values NOL at an enterprise value multiple of only 2.2x 2004 EBITDA
and only 1.7x 2005 EBITDA.
As a significant shareholder, we would like the Board of Directors
of NOL (the "Board") to take a more active role to ensure that the
full value of NOL will be achieved in a sale. Merely rejecting the
offer and not taking an active role facilitates Temasek's ability to
acquire NOL at the current offer price. Furthermore, stating that no
other competing offer has emerged as an indication of the fairness of
Temasek's offer fails to recognize the reluctance of potentially
interested parties to enter a competitive bidding process without the
invitation of the Board. Unless Temasek makes a compelling offer, we
feel that it is incumbent upon the Board to actively solicit other
potential acquirers to ensure that NOL shareholders receive full
We believe that numerous private equity firms and strategic
shipping companies would be interested in acquiring NOL if the
company were to solicit potential acquirers. Opening up the bidding
process to include other potential acquirers as well as Temasek would
ensure that NOL shareholders receive maximum value for their shares.
We have no objection to Temasek acquiring NOL in a process that
maximizes value for all shareholders and in a way that encourages
other potential purchasers to emerge.
In summation, we think that in an open auction process, NOL would
be worth considerably more than the price Temasek is offering.
Therefore, we urge the Board to actively solicit other buyers as a
means of ensuring maximum value for all shareholders.
Given the importance of this matter to shareholders of NOL, we
intend to publicly disclose this letter via press release.
Paulson & Co. Inc. is an institutional investment firm that
manages approximately US$2.9 billion of assets on behalf of U.S. and
international investors. The firm was established in 1994 by John
ots Originaltext: Paulson & Co., Inc.
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Armel Leslie of Walek & Associates, New York, +1-212-889-4113, or