Analysts urge SMRT shareholders to sell stakes in the open market

Price should keep close to $1.68, they said.

SMRT is holding a scheme meeting to decide on the $1.68 per share buyout by Temasek and analysts are urging minority shareholders to accept the offer by approving the scheme arrangement.

OCBC believes the scheme arrangement is a good opportunity for investors to cash out of the company with soft earnings outlook, especially given the high downside risk, -15.4%, from current share price to the fair value estimate of S$1.40.

However, OCBC still warns of possible risks should the arrangement be unsuccessful.

“We note that there is still the risk of this proposed buyout by Temasek falling through, if the scheme is not approved. Hence, we think it makes sense for investors, who would like to mitigate this risk, to sell part of their holdings in the open market at a price closer to S$1.68 before the scheme,” OCBC said.

SMRT will hold the scheme meeting on 29 September 2016 at 3:30pm at The Star Theatre of The Star Performing Arts Centre. Shareholders may vote in person or by proxy.