Context

Union Cement is the largest cement company in the Philippines.

Why the Company is Mispriced

During the Asian Financial Crisis, UCC's share price had fallen from 30 cents to 1-2 cents. This is a foreign company in a weak unstable economy. Part of the misprice is related to this being a highly illiquid security, as share turnover implied an average holding period of 40+ years.

Alternative View

Priced at 1/4 replacement cost, assets are relatively new.
"Deep discount to replacement cost with latent pricing power"

Result

Holcim, the world's largest cement company eventually placed a bid for the whole company at 10 cents in 1997, a 5x return on Nomad's average cost of 2 cents

Notably

Nomad had put in bids, raising prices to 0.025 cents, purchasing 1m of stock, extremely illiquid despite 200m market cap and 700m book value