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Accordia Golf Trust: Buying cheap and cheaper.

Saturday, December 21, 2019

Accordia Golf Trust requested for a trading halt three days ago on 18 December 2019.

I thought to myself then that it was probably too soon to release details about the offer.

Well, yesterday, they released some information along with the appointment of 

Daiwa Capital Markets Singapore 


Ernst & Young Corporate Finance 

as financial advisers to look into the offer to buy all of the Trust's golf courses.

I don't know who drafted the announcement but it wasn't very clear at all what it would mean for unitholders.

The irony is that they called it "Clarifactory Announcement" and it didn't provide any meaningful clarity.

When I use a magnifying glass to read, it is so that I can see better.

It doesn't help if the magnifying glass is made of frosted glass.

Can see but cannot see.

See announcement in:
Accordia Golf Trust's Newsroom.

A reader provided a link to an article in The Business Times on this matter.

After reading the article, I wondered if the same person who wrote the "Clarifactory Announcement" for Accordia Golf Trust also moonlighted for The Business Times.

The newspaper article was simply more of the same.

It is like cleaners wiping dirty tables at a foodcourt with a dirty rag.


Read the article if you want to:
Accordia Golf Trust's parent weighs purchase of all its golf courses

You blur?

I also blur.

Anyway, I decided that I would simply wait and see what the financial advisers have to say.

Regular readers know that the prices I paid for my investment in Accordia Golf Trust were relatively low.

Bought at 54 cents a unit or lower, I believe that I have a pretty good margin of safety.

The last time I added to my investment was in September at 51 cents a unit.

Accordia Golf Trust was very much undervalued.

I believe the Trust is still undervalued today but not so much anymore.

To understand why I invested in Accordia Golf Trust when I did, see:
Accordia Golf Trust.

It is quite clear that I was more interested in Accordia Golf Trust as an income generator.

Don't need a "Clarifactory Announcement" to see that clearly.

Of course, being so undervalued, it could also be an asset play but it wasn't the primary motivation for me to invest in the Trust.

What this means is that I would be quite happy to hold on to my investment if the offer is a lowball one.

I am simply in no hurry to sell.

So, although disappointed and maybe even a little disgusted by the lack of clarity in the Trust's announcement and the newspaper article that followed, I am not losing sleep because of this.

Having said this, there are probably many people who were not shareholders of Accordia Golf Trust before and only bought into the Trust recently at higher prices because of the offer.

I hope they know that they are speculating.

Unlike people investing in Accordia Golf Trust for income, in case it is a lowball offer, holding on to their positions might not be a palatable option for speculators.

This is especially true if they are using money they really should not be using to invest or speculate with.

Unfortunately, from the "Clarifactory Announcement", it looks like someone thinks that Accordia Golf Trust's golf courses are cheap and they are trying to buy them cheaper.

Related posts:
1. Accordia Golf Trust: Reasonable or realistic?
2. Peace of mind as an investor.
"Eat bread with ink slowly." ----- "The letter "b" in "bread" stands for borrowed funds. Don't borrow money to invest."


WTK said...

Hi AK,

This is beneficial for people who focuses on the generated dividends. It does not matter whether there is any takeover. If have, assess and decide whether to accept the offer. If no, continue to milk the dividend whilst holding the shares.


AK71 said...

Hi Ben,

Investing in income producing assets at the right price is a good way to improve our financial health, for sure. :)

WTK said...

Hi AK,

I totally agree with you to some extent. The right price may not be worthy for a wait. I am stating it as per my perspective. As you may have been aware, I have left the full-time employment since early May 2019. I note that I tend to focus less on the share price of the investment portfolio. I just invest based on the scheduled purchase every month. This is derived from the generated dividends from the investment portfolio. I know that it will come to the extent in which I will have to depend on the generated portfolio to cover my existing extent. Currently, I am relying on the two buckets (amounting about 6 years of annual expense) to cover the existing expenses. I previously mentioned eight years of annual expenses and had embarked on reducing the stash to 6 years after my exit from full-time employment. The first bucket is the investment portfolio which focuses on generating the dividends on a continuous basis.

Nowadays, I gradually reduce my attention on these three buckets and focus on doing the things of my interest. This is like you focusing on the "Neverwinter".


AK71 said...

Hi Ben,

Yes, everyone should have a plan, our own plan.

Sounds like you certainly have a plan that suits your circumstances and what you want to do. :D

Have fun! ;)

AK71 said...

New readers might be interested in this blog:
Have a plan, you own plan!

WTK said...

Hi AK,

The plan might not be applicable for all. One will have to devise his/her own plan to cater to his/her needs. My plan might not be relevant or applicable to yours to some extent. The same thing applies to yours. I am of view that one should not be obsessed with the plan. Adopt some form of flexibility in accordance to everchanging circumstance. The most important thing is to know the purpose of such plan. My purpose is to live the rest of my life without any financial worry. Enough is good for me. It does not matter how much the generated dividends from the investment portfolio as per my case. I do not hanker for much riches. I go for sustainability and this sustainability is coupled with my preference for simple and minimalist lifestyle. Such lifestyle might not be the appetite for most of the readers.

Peace of mind and simple lifestyle are my preferred way of living which might not be the cup of tea for most. It is enough for me and I find it to be satisfying as per my perspective.

To each of all own.

My two cents worth of views.


AK71 said...

Hi Ben,

Having a plan is important to provide us with a direction in life.

Of course, things could change and we would have to change with things. ;)

Unknown said...

Hi AK,

Any thoughts on how this will eventually pan out for Accordia in the current economic climate?

Thank you.

AK71 said...

Hi Unknown,

I don't have a working crystal ball, unfortunately.

WTK said...

Hi AK,

I don't think that there is a need for the crystal ball. Just spread the eggs into various baskets and invest on the monthly basis. The market will sort itself up. This will allow one to have the time to pursue his/her interest.


AK71 said...


Unknown was asking for some fortune telling which was why I responded in my usual fashion. ;)

VT said...

Hi AK,

Can you talk to yourself on Accordia on the recent DPU distribution and if you have any thoughts on the long drag proposed buyout. They seem to be quite slow and quiet on any news of this.

Looking at the recent utilization rate which I thought to be unexpectedly good and Japanese are a bunch who loves to golf despite the Japan lockdown. I believe that with lesser traveling, golfing might get traction as people tend to look for activities with social distancing.

AK71 said...

Hi VT,

With the lower activity due to the COVID-19 pandemic, a decline in DPU is to be expected and in AGT's case, it largely has to do with the closure of their F&B outlets.

As for the offer AGT received, it is non-binding and there is no guarantee that it would happen but it doesn't detract from the fact that AGT is undervalued or at least I think so.

I am rather partial to investments that pay me while I wait for value to be unlockd.

It is a strategy that has mostly worked for me in the past and I hope it works again with AGT. ;)

Unknown said...

Hi AK,

I am sure many have missed this letter by Hibiki Partners to the board of Accordia Golf. Sharing it for your readers.


AK71 said...

Hi Unknown,

I saw that.

It is good to have an activist investor on our side.

Thanks for sharing the link. :)

Deet said...

Activist investor is good! now AGT just announced 1.2B yen to be redistributed to shareholders upon approval, as a special distribution...

AK71 said...

Hi Deet,

Activist investor for the win! :D

Deet said...

Hi AK,
What are your thoughts on the Accordia Golf acquisition? Some felt a bit cheated that it is a lowball offer. I'm just happy that it's above my purchase price! haha...

"... Purchase Consideration of JPY 61,800 million (S$804.1 million) translates to an implied purchase consideration of S$0.732 per unit of AGT(“Unit”) ..."

Roaming fighter said...

Hi Ak,
Attached is the offer on AGT

Unknown said...

Hi AK,

thoughts on the lowball offer by Accordia? :D

desmondsph said...

0.732 purchase price

john said...

Is this a good offer price?

AK71 said...

Hi Deet, Roaming fighter, Unknown, desmondsph and John,

I think it is a good price for the buyer (i.e. the sponsor).

Accordia Golf Trust is surely worth more and I blogged about this before.

Not much we can do as retail investors, unfortunately. :(

AK71 said...

See latest blog on AGT:
Accordia Golf Trust: $0.732 offer.

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