Land and House

A happy day for all Land and House Public Company Limited or LH’s shareholders, even though the tender offer has been officially “called off”…..Checkmated by Anant. Looking back on June 21, 2018 when Mr. Anant Asavabhokhin, Thailand’s top rank real estate investor, had made a ruckus to real estate markets and stock markets…..again. LH made a statement through SET to inform shareholders that Mr. Anant Asavabhokhin intended to make a partial tender office for 10% of LH at ฿11.80/share. The LH’s shares responded to the news fairly quickly after the hike to reach ฿11.00/share while the market was on a half day break. Later, LH closed at ฿11.50/share. The increase of LH market price at that time was still uncertain if it was the result from the tender offer or not. If it was a “yes”, did the market overreact on just a 10% offer on the stake? Or was it because the 10% will strengthen its fundamental? This is beyond anyone’s thinking capacity, and it is not a significant matter to waste our time on it. Let’s only look at the big picture of LH’s shares that have already increased ฿1.20/share or roughly 11%. LH closed at ฿12.20/share as of August 3, 2018, which was higher than the price that Mr. Anant had offered. The reason for Mr. Anant backing down on the tender offer is a very interesting point to be discussed. The reason included in the cancellation report says that Siam Commercial Bank PCL or SCB denied his long-term credit limit because Mr. Anant wouldn’t accept the new interest rate set by the bank. We normally do not get to see such action from the kindhearted lender like SCB to not soften on such a big borrower. This matter from SCB is not just an interesting one, but one that needs in depth analytical skills to see why SCB changed Mr. Anant’s loan condition. The general condition on allowing a loan states that “the interest rates that the lender requests from the borrower is considered a compensation from the risk that the lender must bear, and base on the borrower’s ability to settle the debt.” According to the above statement, is it implied that SCB would have a higher risk in allowing Mr. Anant’s loan request? And…..what is that risk? It is not easy to find an answer to this matter. In fact, there may not be anything behind Mr. Anant’s request, but something behind SCB to be in need for something else. Something that SCB needs to make the interest rates relevant to or higher than what it used to be. This is also a case beyond any of our ability to puzzle out, but it is not likely that a professional like Mr. Anant would play this type of seemingly indecisive game to increase the market price. However, considering the margin of the before and after during this period, the most profitable man from the story seems to be Mr. Anant. A rough calculation from Mr. Anat’s LH’s shares, the master of real estate business, shows that he only gained about 3.5 billion baht in profit.