Temasek sells Chartered to Abu Dhabi
Recent news reports that Temasek Holdings is selling Chartered Semiconductor to Abu Dhabi for S$2.5bn. Judging from company reports Chartered appears pretty battered. It’s continually declining share price forced it to undergo a reverse 1:10 stock split on May 21st to prevent its stock price from falling below $1 over the forseeable long term.
According to the report Abu Dhabi paid only 2 cents higher than Chartered’s last closing stock price per share on Sept 4. Was Temasek so desperate to sell Chartered it wasn’t willing to drive a hard bargain?
I can’t be certain but it seems that Temasek didn’t lose money on this and may instead have made a profit by underwriting Chartered’s rights issue back in March this year. Indeed Google Finance shows that Chartered Semiconductor’s share price has risen three-fold from its March lows this year:
It’s rather ironic that Temasek is preparing to sell Chartered just as the company announced that it was upgrading its revenue forecast for 2009 due to improving economic and financial conditions:
Chartered today also raised its third-quarter forecasts for revenue and earnings. Sales will range from S$405 million to S$415 million, up from a forecast of S$382 million to S$394 million, according to a statement. The company now anticipates the result will range from a net loss of S$8 million to breakeven, an improvement from a loss of S$27 million to S$17 million. Chartered’s reported losses in the past four quarters.
So goes Chartered Semiconductor, no longer a Temasek-owned company.