June 2023 - The ACRA's Unfair IPV Wave of company delisting trend

[brattzz]

Hello all,

MOF, Acra accept proposals that make it harder to buy out minority shareholders in an offer, Capital Markets & Currencies - THE BUSINESS TIMES

Compulsory acquisition loophole back in spotlight as TTJ minorities get lowball offer, Columns - THE BUSINESS TIMES

It appears there are already concentrated efforts by bosses of sg listed companies to make low-ball offers to delist their companies before ACRA's unfair IPV regulation is revised,

Please find list of watch-list to enable investor to be aware of and monitor their actions as bosses finds their way out of this "fair" regulation before it comes in-force,

Please note that some pte funds are holding/working with these bosses too, so it will be good to know what they are doing,

Penguin
https://www.dividends.sg/view/BTM

2021 1st offer = 65cts
2023 2nd offer = 83cts + Dymon onboard - 82% wef 7th June 2023 - unlikely to succeed, pending IFA's recommendations
2024/25 Next offer? = definately more than 83cts!

Lian Beng
https://www.dividends.sg/view/L03

2023 1st offer = 68cts - 70.4% wef 7th June 2023 - unlikely to succeed
IFA = REJECT
2024/25 2nd offer = refer to Penguin as case study 

Challenger
https://www.dividends.sg/view/573
2019 = 56cts offer
2023 = 58 cts offer again... 65% wef 5th June 2023

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Not much options left, 

1) Reduce/depressed/stop dividends first, 

2) Offer low-ball price, then see market reactions.. make revised offer if necessary using the reduced/depressed dividends, MOP up all loose shares as much as possible within this offer,

3) If cannot managed to get 90%, but very close...just let offer lapse, try again next year... repeat step 2.

Or,

4) do share placement to dilute the remaining 10% resistance, then offer again next year where there is no more resistance left.....

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BT's Ben Paul! please write another article about this ACRA's UNFAIR IPV WAVE!! raise public awareness sir! thank you so much!

  

[brattzz]

alamak, nobody interested in this trend?

[weijian]

alamak, nobody interested in this trend?

hi brattzz,

This is an interesting topic but probably got ignored by most VBs because it went under the "Others" section.

The trend of private acquisition probably started way back. Built on low interest rates and of course continued low valuations, the change in the CG code that started many years back (probably when Tan Boon Gin became SGX Regulatory chief?) - change in takeover rules, no. of ID representation, 2 tier voting for IDs etc..

And the latest changes (exact pay disclosure and 9 year hard limit for IDs) is going to hit home even harder for many towkays and their "buddies".

https://www.allenandgledhill.com/sg/pers...s-and-ceos

P.S I have moved this thread to create more visibility

[dreamybear]

BT's Ben Paul! please write another article about this ACRA's UNFAIR IPV WAVE!! raise public awareness sir! thank you so much!

  

Was thinking would it be a good idea for interested VBs to come together to send a combined appeal letter to Ben Paul to write another article ? just a suggestion...  

[weijian]

BT's Ben Paul! please write another article about this ACRA's UNFAIR IPV WAVE!! raise public awareness sir! thank you so much!

  

Was thinking would it be a good idea for interested VBs to come together to send a combined appeal letter to Ben Paul to write another article ? just a suggestion...  

hi dreamybear,

"Appeal letter" looks to be part and parcel of the Singapore law abiding system I guess..  What would you want Ben Paul to write about?

No towkay in their right frame of mind, will pay fair value if there is a choice not to. Those whose surname start with Goh are exceptions, not the norm. So, OPMIs need to accept that getting a "fair price" isn't the base scenario for the SG market. Moreover, most of us could be suffering from "endowment effect" bias (ie. valuing what we own more than it probably warrant).

For those who want fair value in takeovers in the SG context, I guess it has to fall under these scenarios:

(1) The towkays themselves are selling. So OPMIs are lucky to be standing on the same side with Towkay. Unfortunately, in the Asian context, most towkays have successors with familial ties (the one that I can think of who doesn't have a clear family member to take over, is the 75 year old chairman/CEO of Powermatic Data). But luckily, some Towkays tend to do spin-offs/sell off their different BUs and these actions benefit OPMIs since everyone is on the same side.

(2) Distrust between 2 major shareholders, resulting in a bidding contest. The last time it happened in the SG context was F&N with 2 elephants fighting over the pie. And it happened only because of the global beer consolidation wars that started about a decade ago. Comes even more rare than a blue moon.