Boustead Projects

[EnSabahNur]

https://www.theedgesingapore.com/news/co...y-boustead

SIAS urges Boustead Singapore to improve privatisation offer for subsidiary Boustead Projects

The Securities Investors Association of Singapore (SIAS) is appealing to Boustead Singapore to improve on its 90 cent per share privatisation offer for its majority-held, separately-listed subsidiary, Boustead Projects.

In a letter to Boustead Singapore’s board on behalf of “aggrieved” shareholders, David Gerald, president of SIAS, acknowledges that the offer price is 7.8% over Boustead Projects’ last traded price of 83.5 cents.

However, as at Sept 30 2022, the company, which focuses on real estate, had a net asset value of $1.265.

“Put differently, the valuation of 0.7x Price/NAV has left a bitter taste in the mouths of Boustead Projects’ minority shareholders given that most of the properties held in the books are valued at historical cost,” says Gerald.

CGS-CIMB analyst Ong Khang Chuen, in his Feb 7 note, gives Boustead Projects a revalued NAV of $1.79 per share, and indicates that the offer price, at half of this level, favours Boustead Singapore.

[Shiyi]

The offeror and concert parties hold 73.54% stake. And they have to get at least 90% shares held by independent shareholders which works out to be 23.81%. All in, the offeror has to own 97.35% stake before privatisation is possible.

[ghchua]

The offeror and concert parties hold 73.54% stake. And they have to get at least 90% shares held by independent shareholders which works out to be 23.81%. All in,  the offeror has to own 97.35% stake before privatisation is possible.

Hi Shiyi,

As mentioned by me previously, it is 75% and not 90% of independent shareholders acceptance plus a "Fair and Reasonable" opinion from the IFA for delisting to go through.
https://www.sgxgroup.com/media-centre/20...older-vote

[setan]

The offeror and concert parties hold 73.54% stake. And they have to get at least 90% shares held by independent shareholders which works out to be 23.81%. All in,  the offeror has to own 97.35% stake before privatisation is possible.

Hi Shiyi,

As mentioned by me previously, it is 75% and not 90% of independent shareholders acceptance plus a "Fair and Reasonable" opinion from the IFA for delisting to go through.
https://www.sgxgroup.com/media-centre/20...older-vote

Hi GH,

Based on the currently issued offer document, is Mr. Wong FF included in the concert parties? Or do we need to wait for the final offer document?

If he is not included, the offeror (Boustead Sing) only have a stake of 54.87% and they need a 75% of the remaining stake to accept the offer in order to delist the company.

Is my understanding correct? 

setan

[ghchua]

Hi punchcardtrader,

Important to understand, by virtue of SGX rules, voters against will not get de-listed against their will.

SGX RegCo had already laid out the requirements for delisting. It is not about against their will. As long as the requirements are met, companies can be delisted even if you do not accept the offer and/or vote no at delisting EGMs. Details are below:
https://www.sgxgroup.com/media-centre/20...older-vote

There is something called sell-out rights in this voluntary , conveniently not mentioned in the announcement.

Sell-out rights has nothing to do with delisting. It just means that you have to right to request the offeror to acquire your shares at offer price. You cannot stop the delisting or increase the offer price with sell-out rights.

Also, sell-out rights are not mentioned yet mainly because the offer have not reached that milestone yet. Which means, minorities do not have this right at the moment.

[ghchua]

Hi setan,

Based on the currently issued offer document, is Mr. Wong FF included in the concert parties? Or do we need to wait for the final offer document?

This is no offer document issued yet. What we have really, is just an offer announcement. And, yes, Mr Wong is a concert party. It is stated in the offer announcement.

3.3 Shareholding in the Company. As at the Announcement Date, the Offeror directly holds 171,896,009 Shares representing approximately 54.87% of the total number of issued Shares of the Company. FF Wong has an aggregate deemed interest in 74.16% of the Shares of the Company (including Shares held by the Offeror), of which he is deemed interested in 19.28% of the Shares of the Company held through nominees. For the avoidance of doubt as FF Wong is a party acting in concert with the Offeror, the Offer does not extend to the Shares that he controls held through nominees (i.e. 19.28% of the Shares in the Company). In addition, FF Wong and his son, Mr. Wong Yu Loon, in their capacities as directors of the Offeror, have abstained from all decisions and deliberations in connection with the making of the Offer, including the terms thereof.

If he is not included, the offeror (Boustead Sing) only have a stake of 54.87% and they need a 75% of the remaining stake to accept the offer in order to delist the company.

Is my understanding correct? 

Again, I refer you back to the offer announcement.

3.3 Shareholding in the Company. As at the Announcement Date, the Offeror directly holds 171,896,009 Shares representing approximately 54.87% of the total number of issued Shares of the Company. FF Wong has an aggregate deemed interest in 74.16% of the Shares of the Company (including Shares held by the Offeror), of which he is deemed interested in 19.28% of the Shares of the Company held through nominees. For the avoidance of doubt as FF Wong is a party acting in concert with the Offeror, the Offer does not extend to the Shares that he controls held through nominees (i.e. 19.28% of the Shares in the Company). In addition, FF Wong and his son, Mr. Wong Yu Loon, in their capacities as directors of the Offeror, have abstained from all decisions and deliberations in connection with the making of the Offer, including the terms thereof.

Since the offer does not extend to the shares that Mr Wong controls, there is no way he could have accepted this offer. So, its really 75% of the independent shareholders to accept the offer for delisting to proceed as one of the requirements.

[punchcardtrader]

Hi punchcardtrader,

Important to understand, by virtue of SGX rules, voters against will not get de-listed against their will.

SGX RegCo had already laid out the requirements for delisting. It is not about against their will. As long as the requirements are met, companies can be delisted even if you do not accept the offer and/or vote no at delisting EGMs. Details are below:
https://www.sgxgroup.com/media-centre/20...older-vote

There is something called sell-out rights in this voluntary , conveniently not mentioned in the announcement.

Sell-out rights has nothing to do with delisting. It just means that you have to right to request the offeror to acquire your shares at offer price. You cannot stop the delisting or increase the offer price with sell-out rights.

Also, sell-out rights are not mentioned yet mainly because the offer have not reached that milestone yet. Which means, minorities do not have this right at the moment.

Respectfully, sorry if I was not clear enough: I did not say NO voters will get their favourite scenario. 

Instead, I saw recent discussion implying a fear that no voters would be left behind with a "dark" stock (unlisted): this is incorrect. 

I just want to repeat clearly: there is no scenario in which NO voters (by virtue of sell-out rights) get left behind in a dark stock against their will. In my opinion (not a recommendation), the upside of voting yes is very considerable, and the downside of voting no is only waiting a bit longer.

[ghchua]

Instead, I saw recent discussion implying a fear that no voters would be left behind with a "dark" stock (unlisted): this is incorrect. 

Well, provided you exercise your right to require the offeror to acquire your shares at offer price after the offer closes. If you do nothing and don't exercise your right and the stock is delisted, then yes, you will be left behind with the so called "dark" stock (unlisted).

[Shiyi]

There is a sentence in the offer announcement:

"The offeror will not be able to avail itself of the powers of compulsory acquisition under Section 215(1) of the Companies Act 1967 of Singapore following the completion of the Offer".

What does that imply?

[ghchua]

There is a sentence in the offer announcement:

"The offeror will not be able to avail itself of the powers of compulsory acquisition under Section 215(1) of the Companies Act 1967 of Singapore following the completion of the Offer".

What does that imply?

This imply that if the stock gets delisted, there is a chance that you will be holding unlisted shares if you did not accept the offer and did not exercise your sell-out right within the stipulated time period, since the offeror could not compulsory acquire the remaining dissenting shareholders after the offer closes.