Select Group Limited

Mmmm....who screwed up? DBS? Independent Directors? PWC Corp Finance? 
None of these guys know the rules beforehand meh?


VOLUNTARY CONDITIONAL CASH OFFER BY DBS BANK LTD. FOR AND ON BEHALF OF
INTERNATIONAL CULINARY MANAGEMENT LTD FOR SELECT GROUP LIMITED
CHANGE OF INDEPENDENT FINANCIAL ADVISER

The Board of Directors (the “Board”) of Select Group Limited (the “Company”) refers to its
announcement dated 1 April 2016 in relation to the appointment of PricewaterhouseCoopers
Corporate Finance Pte Ltd as the independent financial adviser to advise the directors of the
Company who are considered independent (the “Independent Directors”) for the purposes of the
voluntary conditional cash offer (the “Offer”) made by DBS Bank Ltd. for and on behalf of International
Culinary Management Ltd (the “Offeror”) for all the issued and paid-up ordinary shares (“Shares”) in
the capital of the Company, other than those Shares held, directly or indirectly, by the Offeror as at
the date of the Offer.

The Board wishes to update shareholders of the Company that in compliance with the Catalist Rules
of the Singapore Exchange Securities Trading Limited which require a full or continuing sponsor to
provide corporate finance advice, it has now appointed Canaccord Genuity Singapore Pte. Ltd. as the
independent financial adviser to advise the Independent Directors in relation to the Offer.

The directors of the Company (including any who may have delegated detailed supervision of this
announcement) have taken all reasonable care to ensure that the facts stated and all opinions
expressed in this announcement are fair and accurate and that no material facts have been omitted
from this announcement, and the directors of the Company jointly and severally accept full
responsibility accordingly.

Where any information in this announcement has been extracted or reproduced from published or
otherwise publicly available sources, the sole responsibility of the directors of the Company has been
to ensure through reasonable enquiries that such information is accurately extracted from such
sources or, as the case may be, accurately reflected or reproduced in this announcement.

By Order of the Board
Kwok Chi Biu
Company Secretary
14 April 2016

Update as at 18 April 2016

SELECT shareholder structure in relation to 52.5 cents offer

Offer Closing Date extended to 20 May 2016.

Offeror (Tan & Dymon PE) - 42.65% + 18.65% = 64.67%

Ezra Lionel’s Mother -  23.53%

Go Mei Lin & family (Irrevocable UT) - 0% (Tendered shares to Offeror)

% to go b4 90% Suspension due to free float - 1.80% or 2.56m shares

(When this happen, Offeror will send out a notice of suspending the trading to lack of free float, people will sell/tender to Offeror). Standard script.

Offer is now UNCONDITIONAL since Go & family completed the Irrevocable Undertaking by tendering their shares)

**Offeror will NOT have Compulsory Acquisition rights unless Lionel's mom sell
In that scenario, Offeror will face a Keppel  Corp - Keppel Land situation. 

*** Lionel's Mom just need another 1.5% to block any special resolution by the Company.
**** With Lionel's mom holding 23% block, selective capital reduction (a la Keppel) also not an option post-delisting.

So 2 scenarios can happen now:

1) Lionel's mom tenders her shares to Offeror at current or higher Offer price, Offeror gets CA (215) rights. In 3 months after close of Offer, Offeror (Dymon PE & founders) own 100%

OR 

2) Lionel's mom keeps her shares. Offer close. Shares delisted. Shareholders will be Dymon PE, founders, Lionel's mom and all other minority shareholders.

Finally, a small cap company's IDs with backbone.

Read Section 6 and 7 for circular for more info. 

http://infopub.sgx.com/FileOpen/Select%2...eID=400453

7. RECOMMENDATION OF THE RECOMMENDING DIRECTORS
7.1 Recommendation. The Recommending Directors, having considered carefully the terms of
the Offer and the advice given by CGS in the IFA Letter, do NOT concur with the
recommendation of CGS in respect of the Offer for the reasons set out in Section 7.2 and
recommend that Shareholders DO NOT ACCEPT the Offer.

IFA's recommendation below.

Advice of CGS. After having regard to the considerations set out in the IFA Letter, and
based on the circumstances of the Company and the information as at the Latest Practicable
Date, CGS has made certain recommendations to the Recommending Directors, an extract
of which is set out below. Shareholders should read the extract in conjunction with, and in the
context of, the full text of the IFA Letter.

“Based on our analysis, and after having considered carefully the information available to us
as at the Latest Practicable Date, we are of the opinion that, on balance, the financial terms
of the Offer are fair and reasonable.

Accordingly, we advise the Recommending Directors to recommend Shareholders to
ACCEPT the Offer or sell their Shares in the open market if they can obtain a price higher
than the Offer Price after deducting expenses. Shareholders should note that according to
the provisions of the Code, the Offeror remains entitled to increase the Offer Price and if
Shareholders choose to sell their Shares in the open market, they would not have the
potential to benefit from any increase in Offer Price. We are not aware of any indication that
the Offeror will increase the Offer Price.”

Dun really get this... are the rules really as per stated in the announcement? Even if the substantial shareholder sell off (say 2%) some shares tomorrow such that free float goes above 10% at close of offer, will still get suspended? 

http://infopub.sgx.com/FileOpen/Level%20...eID=401123

Based on publicly available information as at the date of this Announcement, as there is currently a substantial shareholder of the Company (the "Substantial Shareholder") who holds approximately 23.53% of the total number of issued Shares but is not a party acting in concert with the Offeror, only approximately 9.50% of the total number of issued Shares (excluding any Shares held in treasury) are held in public hands as at 5.00 p.m. (Singapore time) on 26 April 2016.
As less than 10% of the total number of issued Shares are held in public hands, if the Substantial Shareholder remains a substantial shareholder of the Company and the Offeror holds less than 90% of the total number of issued Shares of the Company as at the close of the Offer, neither the Section 215(1) Threshold nor the Section 215(3) Threshold would have been met, but the SGX-ST may suspend trading in the Shares.

The free float is restored IF

1) the qty Lionel's Mom sell to unrelated and unconnected parties, each not holding <5%

is more than

2) the incremental qty Offeror continued to accept and acquire from the market.

(27-04-2016, 07:12 PM)opmi Wrote: The free float is restored IF

1) the qty Lionel's Mom sell to unrelated and unconnected parties, each not holding <5%

is more than

2) the incremental qty Offeror continued to accept and acquire from the market.

Yes, this is my understanding as well but the announcement seems to state otherwise by placing emphasis on whether she remains a substantial shareholder or not.

"if the Substantial Shareholder remains a substantial shareholder of the Company and the Offeror holds less than 90% of the total number of issued Shares of the Company as at the close of the Offer" - don't know why Offeror must hold < 90%?

Maybe a typo. Should be "and/or the Offeror holds no less than 90%....."

(27-04-2016, 09:23 PM)opmi Wrote: "if the Substantial Shareholder remains a substantial shareholder of the Company and the Offeror holds less than 90% of the total number of issued Shares of the Company as at the close of the Offer" - don't know why Offeror must hold < 90%?

Maybe a typo. Should be "and/or the Offeror holds no less than 90%....."

I think its trying to highlight the case whereby compulsory acquisition criteria is not met + free float is below 10%

Yes.

If Offeror raises bid, then we can roughly see how much premium does a "compulsory acq"/100% owned command.

NO INCREASE OF OFFER PRICE

http://infopub.sgx.com/FileOpen/No%20Inc...eID=401427