This excerpt taken from the PCNTF 6-K filed May 16, 2007.


In arriving at our opinion, we have considered the factors set out in our Summary of Supporting Analysis as attached. Our conclusions in respect of the factors considered are set out below:


  (a) Our liquidity/brokerage research analysis indicates that PacNet shares trade at significantly lower volumes and values when compared to the 10 most highly traded stocks on the Nasdaq (75.9% and 75.5% lower than the median of the 10 most highly traded stocks on the Nasdaq for volume and value traded, respectively). The trading data is, however, in line with trading data for Nasdaq-listed companies which have broadly similar market capitalization to that of PacNet. The analysis also shows that PacNet does not have any brokerage research coverage while its Peer Group is covered relatively well. Although, there are other significant factors that may impact liquidity of PacNet shares, the lack of analyst research would certainly be a key factor affecting the liquidity of the shares negatively.


  (b) Our historical share price analysis going back one year from the Pre-Conditional Offer Announcement Date shows that the share price of PacNet has been below the Offer Price. It closed above the Offer Price only on three separate occasions after the announcement of the Pre-Conditional Offer. The analysis further shows that the Offer Price is at a premium to the VWAP for all observation periods considered from 30 months before the Pre-Conditional Offer Announcement Date to the Latest Computation Date.
  (c) Based on our Peer Group Analysis, we note that PacNet’s adjusted EV/EBITDA multiple of 9.2 times (as implied by the Offer Price) is at a discount of 28.7% to the adjusted median multiple of all IP-based CSPs which is 12.9 times. The unadjusted EV/EBITDA multiple is at 12.1% discount to the median multiple of all IP-based CSPs. However, the adjusted EV/EBITDA multiple for IP-based CSPs companies with market capitalization of under US$250 million has a median of 7.0 times. PacNet’s adjusted EV/EBITDA multiple is at a premium of 31.4% to the median adjusted EV/EBITDA multiple of IP-based CSPs companies with market capitalization below US$250 million. We further note that PacNet’s adjusted EV/EBITDA multiple, as implied by the Offer Price, is at a discount of 55.3% and 28.1% to the median EV/EBITDA multiples of the IP-based CSPs from the US and Europe, respectively. The adjusted EV/EBITDA is at a premium of 12.2% to the median EV/EBITDA multiple of comparable companies in the Rest of the World, which are all based in Asia Pacific.
  (d) We note that PacNet’s implied unadjusted EV/EBITDA multiple of 10.9 times is at a discount of approximately 31.0% to the median implied EV/EBITDA multiple of IP-based CSPs Comparable Transactions. We note that all the transactions completed have involved target companies based in either Europe or in North America except for Sify Ltd, which is based in India. The EV/EBITDA multiple for the Sify transaction is not meaningful.


     We further note that the implied unadjusted EV/EBITDA multiple is at a premium of approximately 29.8% and 60.3% to the implied EV/EBITDA multiples of the last two offers made by MediaRing Ltd since May 2006.



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  (e) Based on our precedent tender offer analysis we note that PacNet’s tender offer premium for different observation periods up to 12 months preceding the Pre-Conditional Offer Announcement Date are generally lower than the mean and median offer premia for Nasdaq-listed entities. We believe that this is due to the fact that during this period PacNet has received 2 other offers which has kept the PacNet share price at or near the respective offer levels. The tender offer premium when compared to observation periods going beyond 12 months (e.g. from 18 months to 30 months) indicate that the Offer Price is in line with tender offer premia of Nasdaq-listed entities.

Besides the above analysis, we have also held discussions with the Management regarding their business plans which included country-wise profit and loss projections for up to FY2010. We analyzed the projections and carried out sensitivity analyses on the projections.

After having carefully considered the information available to us as of, and based upon the monetary, industry, market, economic and other relevant conditions subsisting on the Latest Computation Date and based on the factors above, we are of the opinion that, from a financial point of view, the financial terms of the Offer are fair.

In rendering the above opinion, we have not taken into consideration the specific investment objectives, financial situation, tax position or unique needs and constraints of any individual Shareholder. Accordingly, any individual Shareholder who may require specific advice in relation to his investment portfolio including his investment in the Company should consult his stockbroker, bank manager, solicitor, accountant, tax adviser, or other professional adviser immediately.

This opinion is governed by, and construed in accordance with, the laws of Singapore, and is strictly limited to the matters stated herein and does not apply by implication to any other matter.


5.2 Intention of Directors, Executive Officers and Affiliates

Save as disclosed below, the Company, after due inquiry, is not aware that any executive officer, Director, affiliate or subsidiary of the Company currently intends to tender or sell under the Offer, the PacNet Shares that are held of record or beneficially owned by such person. In addition, the Company, after due inquiry, is not aware that any Director or executive officer currently intends to accept the Options Proposal in respect of any Options currently owned by them.

On 12 January 2007, Connect received an irrevocable undertaking from VCL to tender all PacNet Shares held by VCL. Please refer to Section 2.8 of this Circular for more details on the irrevocable undertaking.



The following information on Foreign Shareholders has been extracted from section 1.10 entitled “Foreign Shareholders” (page 26) of the Offer to Purchase:

This excerpt taken from the PCNTF 6-K filed May 14, 2007.


We would like to remind you in spite of the present events, we always place shareholders and customers at the center of our considerations, and maintain a normal course of business and solidify our business foundation.

Asia Pacific is experiencing tremendous growth in broadband. Pacific Internet is transforming at the right time in the right space. We will continue to invest to strengthen our position in this exciting market. The Pacific Internet today is a different Company from a year ago. There is renewed energy and vigor throughout the organization. Our execution has sharpened. Despite the shareholder changes and actions, the management and employees are committed to maximizing shareholder value and remain focused at serving our customers by increasing the value we bring to them.


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I would like to now turn the call over to Tuck Chuen. Thank you.

# # #


May 16, 2007
May 14, 2007
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