Great Eastern Holding

[money]

i thought ocbc made the wrong move. They should have just paid the mid point of the IFA's fair price recommendation and most likely get enough acceptance. Now with a higher dividend, it is harder for shareholders to part with their shares

[weijian]

i thought ocbc made the wrong move. They should have just paid the mid point of the IFA's fair price recommendation and most likely get enough acceptance. Now with a higher dividend, it is harder for shareholders to part with their shares

Hi money,
It is probably still too early to conclude that OCBC made the wrong move. Matter of fact, I think they are making the right moves.

As of last announcement on 15th July, OCBC has garnered ~5.1% out of the ~11.6% shares it didn't own. This means the "unfair price" has already gather two-fifths of what it didn't own. The offer closed on 12th July but shareholders have until 12th October to tender. So plenty of time for shareholders to get the current dividend (end Aug) and then tender their shares.

If there is a scenario where a "second and higher price" transpires in the future as a result of a SGX RegCo directed delisting, OCBC will be paying that for a much smaller % than the original 11.6%. My guess is that OCBC will eventually pay less overall in a 2 step process compared to the 1 step you mentioned. After all, OCBC is in no hurry as what matters most is that the acquisition is accretive to their own earnings.

[ghchua]

Hi weijian,

This "two step" delisting process that you mentioned here is against the spirit of fair voluntary delisting, which SGX Regco had said that it follows the voluntary delisting requirement of more than 75% acceptance and a "Fair and Reasonable" opinion.

In a voluntary delisting situation, an "unfair" offer price would not be presented to shareholders to vote at an EGM, thereby no acceptance until the offeror made a fair offer and then it goes to voting at an EGM for a 75% majority vote to be carried. If the EGM is carried, then shareholders can be presented with the offer for acceptance. All shareholders who accepted the offer after the voluntary delisting resolution had been carried will be offered the same fair offer price.

See the difference here? In the first case study, there are two sets of shareholders who accepted the offer and had been paid two different offer prices, one unfair and one fair. In the second case study, all shareholders who accepted the offer had been treated equal. Both case studies are having the same final destination - That is, they are aiming to be delisted at the end of their corporate actions.

[Shiyi]

Hi weijian,

This "two step" delisting process that you mentioned here is against the spirit of fair voluntary delisting, which SGX Regco had said that it follows the voluntary delisting requirement of more than 75% acceptance and a "Fair and Reasonable" opinion.

In a voluntary delisting situation, an "unfair" offer price would not be presented to shareholders to vote at an EGM, thereby no acceptance until the offeror made a fair offer and then it goes to voting at an EGM for a 75% majority vote to be carried. If the EGM is carried, then shareholders can be presented with the offer for acceptance. All shareholders who accepted the offer after the voluntary delisting resolution had been carried will be offered the same fair offer price.

See the difference here? In the first case study, there are two sets of shareholders who accepted the offer and had been paid two different offer prices, one unfair and one fair. In the second case study, all shareholders who accepted the offer had been treated equal. Both case studies are having the same final destination - That is, they are aiming to be delisted at the end of their corporate actions.

Boustead Spore used the two-step measures to privatise Boustead Project. In the second step, the offer price was at the lower end of the RNAV and considered "fair" by IFA. This can serve as a template for OCBC to privatise GEH six months down the road.

[ghchua]

Boustead Spore used the two-step measures to privatise Boustead Project. In the second step, the offer price was at the lower end of the RNAV and considered "fair" by IFA. This can serve as a template for OCBC to privatise GEH six months down the road.

Hi Shiyi,

It is different as I mentioned at a different topic earlier in this forum. Boustead Spore secured more than 75% acceptance rate for the first offer, which OCBC did not do that for Great Eastern when the first offer closes.

[Shiyi]

Boustead Spore made voluntary unconditional offer and there was no scheme meeting for the first offer. Just wondering how did the "more than 75% acceptance" info come about?

[weijian]

Boustead Spore made voluntary unconditional offer and there was no scheme meeting for the first offer. Just wondering how did the "more than 75% acceptance" info come about?

hi Shiyi,

VB.com has been talking about this for quite some time. Please refer to the graphic I posted earlier in this GEH thread.

https://www.valuebuddies.com/thread-2273...#pid171305

[weijian]

Hi weijian,

This "two step" delisting process that you mentioned here is against the spirit of fair voluntary delisting, which SGX Regco had said that it follows the voluntary delisting requirement of more than 75% acceptance and a "Fair and Reasonable" opinion.

In a voluntary delisting situation, an "unfair" offer price would not be presented to shareholders to vote at an EGM, thereby no acceptance until the offeror made a fair offer and then it goes to voting at an EGM for a 75% majority vote to be carried. If the EGM is carried, then shareholders can be presented with the offer for acceptance. All shareholders who accepted the offer after the voluntary delisting resolution had been carried will be offered the same fair offer price.

See the difference here? In the first case study, there are two sets of shareholders who accepted the offer and had been paid two different offer prices, one unfair and one fair. In the second case study, all shareholders who accepted the offer had been treated equal. Both case studies are having the same final destination - That is, they are aiming to be delisted at the end of their corporate actions.

hi ghchua,

I can understand where you are coming from. But things ain't really fair for minorities all this time, isn't it? Nonetheless, over time rules have been implemented to reduce the amount of "unfairness". I have faith it will only get better over time.

For the current case, while OCBC's offer closed on 12th July but there is still a 3 month period for OPMIs to send in their acceptances. Does the 75% account for the period that closed on 12th July, or will it also include the next 3 month period?

[ghchua]

Boustead Spore made voluntary unconditional offer and there was no scheme meeting for the first offer. Just wondering how did the "more than 75% acceptance" info come about?

The "more than 75% acceptance" came about after the close of the first voluntary unconditional offer at 95c per share for BP.

[ghchua]

For the current case, while OCBC's offer closed on 12th July but there is still a 3 month period for OPMIs to send in their acceptances. Does the 75% account for the period that closed on 12th July, or will it also include the next 3 month period?

I am not sure about that, but as things stand, OCBC did not get more than 75% acceptance for GEH after the offer closes. What happened after the offer closes is subject to interpretation and it is something new for SGX Regco to consider.