Is Thai Village underpriced or Apex-Pal overpriced?

HAS the market underpriced Thai Village Holdings? Or has Apex-Pal International run ahead of itself?

These were the questions brokers were pondering as Apex-Pal jumped 4.5 cents to 43.5 cents at the tail-end of trading yesterday.

The Japanese restaurant chain has offered to buy out all minority shareholders of Thai Village for 0.6 of an Apex share per Thai Village share. And at yesterday's closing price, this values Thai Village around 26 cents a share.

However, the latter's stock hardly moved yesterday, closing at 20.5 cents - implying that it is underpriced in the market by six cents.

But the offer of 0.6 of an Apex Pal share per Thai Village share is just one of three options on the table.

Apex-Pal is also offering Thai Village shareholders the option of 20.1 cents cash per share, or 0.2 of an Apex Pal share plus 13.4 cents cash per Thai Village share.

Apex-Pal is headed by its founder Douglas Foo, who controls 64.4 per cent of the company via some 91.5 million shares. The controlling shareholders of Thai Village are its managing director Lee Tong Soon and executive directors Kok Nyong Patt and Lee Tong Kuon, who together hold 31 per cent of the company.

The takeover, which will see Thai Village issue 73 million new shares, received in-principle approval from the Singapore Exchange on March 27.

It is still subject to approval by shareholders of both companies.

In the meantime, the market appears to have missed the implication of Apex-Pal's stock price rally yesterday.

Thai Village started as a partnership in 1991 with the first Thai Village Sharksfin Restaurant on East Cost Road. The group now has a chain of self-managed restaurants and franchised restaurants in Singapore, China and Indonesia.

Apex-Pal opened its first food and beverage outlet in 1997 and now has a portfolio of six brands including the Sakae Sushi chain of conveyor belt sushi restaurants and Hibiki, a fine dining contemporary Japanese restaurant.