W Capital Markets defends valuation for Sinarmas Land’s privatisation offer

It stands by its estimated share price range of S$0.35 to S$0.361.

W Capital Markets, the independent financial advisor (IFA) for Sinarmas Land, has issued a response to recent media reports and concerns raised by the Securities Investors Association (Singapore) (SIAS) regarding its valuation for the company’s privatisation offer.

The firm defended its use of the Sum-of-the-Parts (SOTP) valuation method, stating that it is a widely accepted and appropriate approach.

W Capital Markets stands by its estimated share price range of S$0.35 to S$0.361, which reflects the value of Sinarmas Land’s assets, including its Indonesian-listed subsidiaries.

The firm also pointed out that the valuation methods used were carefully considered, taking into account the company’s corporate structure and the independent management of its subsidiaries.

In response to concerns raised about "double discounting" in the valuation of unlisted assets, W Capital Markets clarified that the 20%-22% holding company discount applied is a standard industry practice.

This discount, which reflects the risks and challenges of owning a holding company, is separate from the valuation of Sinarmas Land’s remaining assets, it added.

The firm noted that similar privatisation transactions have typically been completed at a discount to RNAV, supporting the validity of their approach.

W Capital Markets further addressed claims that its valuation did not account potential changes after privatisation, stressing that "it is not the IFA’s role to speculate and assess on a fundamentally different post-transaction private-market valuation framework when the Company is no longer publicly listed".

The firm emphasised that their approach is consistent with industry practices and based on solid professional judgment.

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