A huge block of Guocoleisure shares were traded at 61 cents in a married deal just after lunch last Friday. The seller is likely Third Avenue Fund Management, which looks to have dumped its significant stake in the company at a substantial loss (shares were acquired at about $1.20 a few years back).
What is more interesting is the identity of the buyer, who may be Quek Leng Chan, the Malaysian billionaire who controls the Hong Leong Group. QLC is already the largest shareholder and previously attempted to privatise the company through Guoco Group at $1.25. Could another privatisation offer be in the works?
Hopefully not, as any offer at this stage would likely be closer to the recent trading range of 70-plus cents rather than the $1-plus figure most minority shareholders are hoping for.
With the company's shares still at a significant discount to book value, the shares remain an attractive investment. In particular, the Bass Strait Royalty is a gem of an investment, returning solid profit year after year and requiring no capital injections or operating costs. With oil prices remaining elevated, the royalty is expected to produce a significant contribution to overall profit in the years to come.