Keppel Limited

[Boon]

Hi Boon,

Thanks for the info.

Hi Boon,

Can you explain to me how a scenario 3 could happen.

I think 3 scenarios could happen at the close of the offer:

1) If KepCorp crosses the compulsory acquisition threshold (>90%) => compulsory acquisition and delisting of KepLand
2) If KepCorp fails to cross the compulsory acquisition threshold ( < 90% ) BUT KEPland still meets the “free float” requirement of the Listing Manual (i.e. at least 10 per cent of the total number of issued Shares are held by at least 500 Shareholders who are members of the public) => KepLand would remain listed.
3) If KepCorp fails to cross the compulsory acquisition threshold ( < 90% ) AND KepLand does not meet the “free float” requirement of the Listing Manual => KepLand would be delisted until the "free-float" condition is restored.
" In the event the Company does not meet the free float requirements of the Listing Manual, the Offeror does not intend to maintain the present listing status of the Company and accordingly, does not intend to place out any Shares held by the Offeror to members of the public to meet the Shareholding Requirement. "

KepCorp holds 89%, less than 500 other shareholders who are members of the public hold the other 11%.

Hi Boon and Layman A

Scenario 3 technically cannot happen straight away. Because if KepCorp fails to cross the 90% threshold, that means at least 10% is "free float" aka in the hands of the public. So the company will not get delisted.

I am just trying to say that that's not a good scenario for minority shareholders because the share price will drop after the offer expires, and there's nothing to stop Kepcorp from accumulating slowly to eventually reach 90%. It just takes a bit longer but after everything is done and dusted, they can actually accumulate at a lower price.

They just have to accumulate to reach 90%, and they have already indicated their intention to purposefully NOT maintain an adequate free float to force a delisting.

This happened to Pertama Holdings just a few years back. I was one of the minorities that accepted the buyout offer, but they couldn't trigger the 90% threshold. So those who didn't accept, got stuck. The share price was in limbo for over a year, with very low liquidity. (Most of the shares were held by the major shareholder)

Hi GFG & Layman A,

Under the the “takeover-code/companies act”, once, the Offeror crosses the 90% compulsory acquisition threshold level, the “public free-float” would be less than 10% - hence delisting.

Under the SGX-Listing-rules, if public free-float condition no longer complys – SGX would delist the company until the public free-float condition is restored.

These are two separate rules

As for Pertama, HN holds only 83.1% (< 90%), and it was delisted because the free-float was at 7.77%

Presumably, the remaining 9.14% was held by SSH who are not a concerted party to the Offeror and whose shareholding would not be counted as “free-float”.
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Electronics company Pertama Holdings told to delist from SGX, exit offer to be made
Published on Jul 8, 2013
http://www.straitstimes.com/breaking-new...be-made-20

By Fiona Chan

The Singapore Exchange (SGX) has directed Pertama Holdings, a retailer, wholesaler and distributor of consumer electronics products in Singapore and Malaysia, to delist from the bourse.

This comes as shares in Pertama have been suspended from trading since January 27 last year, after the proportion of shares in public hands fell below 10 per cent. Only about 7.77 per cent of Pertama's total issued ordinary shares are held by the public.

The controlling shareholder, Harvey Norman Singapore, and its 60 per cent subsidiary Harvey Norman Ossia (Asia) together hold 83.16 per cent of Pertama's shares.

Harvey Norman said in a statement on Monday morning that it has no intention to restore Pertama's public float to enable it to continue its listed status.