Dutech Holdings

[Yoyo]

Thanks for your clarification, dydx.

Possible Outcomes
1.  Compulsory acquisition. (though remote)
2.  Maintain free float, remain listing.  Offeror make a 2nd GO attempt after one year.
3.  Lose free float, follow by trading suspension. Delisting offer.(need not wait for one year, right?)

I am interested in Outcome 3.
a.  In Outcome 3, the GO fail with a offer price of 43.5c, should the Offeror try to delist by offering a higher price (than 43.5c) in order to meet the fair and reasonable requirement, is he allowed to do so? 
b.  The GO exercise and the Delisting exercise are two separate and independent corporate actions?  Should the Offeror indeed make a higher price for delisting, he is not liable to the shareholders who have previously acceptance the GO?

I am not certain about the above scenario is legally permitted, but it make sense to me for the Offeror to lock in whoever have accepted the offer, and thereafter, subject a higher price (delist price) to those who have previously reject - if the Offeror is permitted to do so?  Lesser money and lesser time compared to await for 2nd attempt.

Would like to clear my doubts, any feedback is much appreciated.  Many thanks.

[dydx]

Yoyo,
Your Outcome 3 is highly possible if Droege Group and Robert Stone choose to play hard ball all the way - and they can afford to do so! And if Offeror ends up paying more for their blocks of shares in a final delisting offer, those other minority shareholders who follow the 2 will stand to gain more as well.

While Dr Johnny Liu may not like to pay more to all the minority shareholders, he may just agree if the extra is not too much more, or he wishes to privatise Dutech soonest, or he doesn't like the extra trouble and costs of a 2nd attempt.

[Shiyi]

Yoyo,
My assumption is that Dr Johnny Liu and Dr. Hedda Juliana im Brahm-Droege (both directors and know each other for many years already) - and also Dr Johnny Liu and Robert Stone - are talking to come to a settlement for their respective blocks of shares, as I don't believe either of them wants to stand in the way if Dr Johnny Liu is dead serious to privatise/delist Dutech. Ultimately, it is a matter of negotiating for a fairer price agreeable to both sides. If they can agree on say $0.05/share more - i.e. $0.485/share, or just another 11.5% more than the now revised offer at $0.435/share - and the two sign an undertaking to sell their blocks, that settlement price will become the new offer price for all other minority shareholders, including those who have already accepted the offer. I believe such a scenario remains likely, even though the Offeror has proclaimed the revised offer at $0.435/share being Final.

If the 3 parties could not agree on a fairer settlement price, the Droege Group and Robert Stone and other minority shareholders who cannot accept $0.435/share and choose to hold on, then this exercise may drag on further, and in the end Dutech may or may not be delisted. One thing for sure, Dr Johnny Liu will have to offer much more in the 2nd privatisation attempt.

Read and learn quite a bit of interesting scenarios and guesswork on this forum. It would be good if any corporate lawyer on this forum that can provide "authoritative" explanation to the following:

1. Having failed in the "final"offer during Voluntary Offer to delist the company, is the offeror allowed to make another higher offer through delisting resolution (presumably through scheme of arrangement)?  

2. If so, will the minority shareholders who have accepted the offer earlier on be compensated?

3. IFA comment on the offer is "not fair but reasonable". Subsequently, the offeror revised the offer price. Given this, 
does the "not fair but reasonable" comment still apply should the offeror decide to make a delisting offer, or another IFA be appointed ?

[Yoyo]

Hi all
Robert Stone has tendered acceptance for his stake.

[ghchua]

1. Having failed in the "final"offer during Voluntary Offer to delist the company, is the offeror allowed to make another higher offer through delisting resolution (presumably through scheme of arrangement)?  

2. If so, will the minority shareholders who have accepted the offer earlier on be compensated?

3. IFA comment on the offer is "not fair but reasonable". Subsequently, the offeror revised the offer price. Given this, 
does the "not fair but reasonable" comment still apply should the offeror decide to make a delisting offer, or another IFA be appointed ?

I am not a corporate lawyer, but some of your questions do not really need someone with legal background to answer.

1. The matter of fact is that the "final offer price" is issued based on the current voluntary offer. Subsequent actions after the offer closes will not bind the offeror to this "final offer price". For example, if an offeror makes a voluntary cash offer of 50cts as a "final offer price". After the offer closes and company stay listed. You mean the offeror cannot buy the company shares at above 50cts anymore after the offer closes? The same goes for other corporate actions (like delisting, SOA etc) if you answer my question here.

2. This is a legal question, which I could not answer. Yes, we might need someone with a legal background to answer. But in general, I think the duration counts. If they come back with a higher offer one year later, I don't think they need to compensate.

3. No. The IFA opinion is valid only for the current voluntary offer. Any other subsequent corporate actions they undertake after the current offer closes, they would need to employ another IFA to give another opinion.

[Shiyi]

1. Having failed in the "final"offer during Voluntary Offer to delist the company, is the offeror allowed to make another higher offer through delisting resolution (presumably through scheme of arrangement)?  

2. If so, will the minority shareholders who have accepted the offer earlier on be compensated?

3. IFA comment on the offer is "not fair but reasonable". Subsequently, the offeror revised the offer price. Given this, 
does the "not fair but reasonable" comment still apply should the offeror decide to make a delisting offer, or another IFA be appointed ?

I am not a corporate lawyer, but some of your questions do not really need someone with legal background to answer.

1. The matter of fact is that the "final offer price" is issued based on the current voluntary offer. Subsequent actions after the offer closes will not bind the offeror to this "final offer price". For example, if an offeror makes a voluntary cash offer of 50cts as a "final offer price". After the offer closes and company stay listed. You mean the offeror cannot buy the company shares at above 50cts anymore after the offer closes? The same goes for other corporate actions (like delisting, SOA etc) if you answer my question here.

2. This is a legal question, which I could not answer. Yes, we might need someone with a legal background to answer. But in general, I think the duration counts. If they come back with a higher offer one year later, I don't think they need to compensate.

3. No. The IFA opinion is valid only for the current voluntary offer. Any other subsequent corporate actions they undertake after the current offer closes, they would need to employ another IFA to give another opinion.

Thank you ghchua.
Going by Vard's case, I believe the offeror has to wait for one year to launch a GO. It's unlikely that the offeror, having failed to delist the company through voluntary offer, immediately makes another attempt to delist the company. That's my layman understanding.

[dreamybear]

Hi all
Robert Stone has tendered acceptance for his stake.

Wow, he has cashed in S$10m worth of shares. 
https://links.sgx.com/FileOpen/_Form_3-R...eID=675318

From the article below, it seems he first bought the shares in 2009, thus he has held Dutech shares for more than 10 years, a long term investor indeed. 
https://www.nextinsight.net/index.php/st...-investing-

[ghchua]

Thank you ghchua.
Going by Vard's case, I believe the offeror has to wait for one year to launch a GO. It's unlikely that the offeror, having failed to delist the company through voluntary offer, immediately makes another attempt to delist the company. That's my layman understanding.

Maybe I give you another case study besides Vard. Information are all available on SGXNet, you can search from there if you need further information.

On 1 July 2019, RAFFLES INFINITY HOLDINGS PTE LTD made a mandatory unconditional cash offer for Raffles United Holdings at 6.5cts.
https://links.sgx.com/FileOpen/Raffles%2...eID=566450

On 14 August 2019, offer closes.
https://links.sgx.com/FileOpen/Raffles%2...eID=574795

On 25 October 2019, GATXH HOLDINGS PTE. LTD. made a voluntary unconditional general offer for Raffles United at 6.5cts.
https://links.sgx.com/FileOpen/RUHL%20-%...eID=583148

Both offers, although made by different entities are related to the same controlling shareholder. The time difference between the first and second one is less than one year, though the offer price is the same.

[¯|_(ツ)_/¯]

dutech@43
Graham accepted
https://links.sgx.com/FileOpen/_Form_1-G...eID=675589

c.f. GATXH offer, Raffles United share was suspended and hence the offer make sense bah...


Stay home and stay safe, everyone.

[ghchua]

Hi  ¯|_(ツ)_/¯,

Graham accepted
https://links.sgx.com/FileOpen/_Form_1-G...eID=675589

Well, he recommended shareholders to accept the initial Dutech offer at 40cts per share. He has to make good his own recommendation right?

c.f. GATXH offer, Raffles United share was suspended and hence the offer make sense bah...

The Raffles United case study I shared was in response to Shiyi's comment that "the offeror has to wait for one year to launch a GO." The case study had shown that his comment was false as in the case of Raffles United, they launched a GO a few months after a takeover offer closes.

Whether the share had been suspended or not after the offer closes didn't give the offeror an "excuse" to make another offer so soon after the previous one closes. The case study shows that the "one year" window might not be there after all.