Dr. Colin Lee Soon Soo, the founder and managing director of TMC Life Sciences Bhd (KLSE: TMCLIFE, stock-code 0101) has sold all his 120.4 million shares (at RM0.52 a share) in TMC to Singapore billionaire Peter Lim Eng Hock. Interestingly Dr. Colin’s brother, Lee Soon Swee, has also disposed his 29.2 million shares to the billionaire as if a plague has just struck TMC. TMC Life is synonym with Dr. Colin and one cannot imagine what would happen to the image of TMC without Dr. Colin.
With over 25 years in medical practice and the pioneer in IVF (In-Vitro-Fertilisation) Pregnancy in Malaysia, Dr. Colin’s customers include some celebrities from Hong Kong. The Consultant Obstetrician and Gynaecologist whose main office was at Damansara Fertility Center, PJ, (before the emerging of tycoon Vincent Tan) was instrumental in driving the business of TMC especially in the IVF Pregnancy area. The tricky question is: will Dr. Colin leave the company he founded after pocketing his handsome gains?
At this moment it was reported that Dr. Colin will remain as the managing director and continue his passion with TMC. Analysts are not particularly excited with the emergence of tycoon Peter Lim who acquired 29.6% stake in TMC making him the second largest shareholder after local tycoon Vincent Tan (with owns 31.7%). Peter Lim Eng Hock, who was known as “King of Remisiers” once in Singapore bought 178 million TMC shares via Hong Kong-based Gilberta Investments Ltd.
The Singapore’s 8th richest man with a net worth of US$1.6 billion also has stake in palm oil Wilmar International and recently acquired 5.75% stake in Singapore’s Healthway Medical Corp. Interestingly Peter Lim is also the second largest shareholder in Informatics Education (19.05%) behind Vincent Tan’s 34.1% stake. But Peter knows nut about healthcare industry. He’s an investor who buys and sells to make profits. And since Peter and Vincent are buddies you don’t have to look far on how TMC stock price will go.
Healthcare is a lucrative business and Khazanah Nasional Berhad’s willingness to offer top money at S$3.95 (RM9.24) a share in acquiring Singapore’s Parkway Holdings Ltd for a total S$3.5 billion (RM8.19 billion) last month shows there’s great prospect in recession-free healthcare business. And both Vincent and Peter knew this. But the interesting question is why Dr. Colin was willing to dispose his entire stake in the company he founded at this moment?
Could it be that Dr. Colin and Vincent Tan does not see eye to eye especially in the management and direction of TMC? TMC was making good profit until the decision to expand and it’s no secret that the Tropicana Medical Center is the main cause that is bleeding the bottom-line of TMC. TMC made a loss of RM8.75 million for the financial year 2009 and the losses continue for the first quarter 2010 despite higher revenue.
Time will tell if Dr.Colin had made his biggest mistake by exiting TMC. Unlike StemLife Berhad (KLSE: STEMLFE, stock-code 0137) which core business is in stem-cell storage only, TMC Life’s business is more diversified. So it would be foolish to exit now if indeed TMC Life’s future prospect is bright. Dr. Colin does not need money for vacations unless of course he need huge capital to start another new healthcare center of his own *grin*. Then it makes sense for him to exit.
Assuming Dr. Colin plans to exit eventually, will that affect TMC’s business especially its forte in fertility segment? Certainly – simply because TMC was built around Dr. Colin’s expertise in the field of fertility. But Dr. Colin could have entered into an agreement not to exit within certain period of time (by 2012?) of which Vincent Tan and Peter Lim would have sufficient time to repackage TMC before selling it for huge profits. Alternatively Vincent and Peter can continue growing the business for 5-10 years and hope to attract deep-pocket buyers such as Khazanah.
Nevertheless as much as healthcare is a lucrative business, this sector also demands very niche skills not only in administration but also in the medical field. That was why analysts weren’t excited with the entry of Peter Lim because he doesn’t have the medical expertise and hence the value-adds to the company. At an entry price of RM0.52 a share, logically Peter Lim will only sell at a higher price so the TMC stock provides ample space to rise. Of course one cannot discount corporate merger comprises TMC Life, StemLife and Berjaya Corporation – all have Vincent Tan’s footprints.
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