CapitaMalls Asia

[ghchua]

Okie. CK Tang a bit OT here since this is about CMA. So, let me look at CMA instead.
For CMA, they have used a company, Sound Investment Holdings Pte. Ltd., a wholly-owned subsidairy of CapitaLand to make the offer. So, Companies Act applies here. Very straight forward.

The offeror, Sound Investment Holdings Pte. Ltd. owns zero shares before they made the offer. So, it is very clear that to compulsory acquire all the remaining CMA shares out there, they need 90% of all the offer shares. But wait, concert parties (aka CapitaLand and friendly parties) already own more than 65% of the offer shares. The offer is also conditional on the offeror and its concert parties carrying more than 90% of the voting rights as at the close of the Offer.

The Offeror reserves the right to waive the Acceptance Condition or reduce such condition to a
level below more than 90% (but in any event above 50%) of the voting rights attributable to all
Shares in issue as at the close of the Offer, subject to the approval of the Securities Industry
Council of Singapore (“SIC”).

Assuming that the offeror did not waive or reduce the acceptance condition, it is very clear that minorities will not hold delisted shares at the end of the offer. If the offeror gets more than 90% at the close of the offer, they will execute the compulsory acquisition to acquire all the remaining shares out there from non-accepting shareholders and proceed to delist CMA from SGX. If the offeror does not get more than 90% at the close of the offer, all the shares will be returned back to shareholders and CMA will continue to be listed, with CapitaLand and friendly parties holding more than 65%.

But if the offeror waive or reduce the acceptance condition (subjected to SIC approval), then we might have a case whereby CMA continue to be listed but CapitaLand and friendly parties holding say more than 70%, 80% etc if they could not get enough acceptance to execute the compulsory acquisition. CMA will continue to be listed but of course the offeror can come back with voluntary delisting resolution at a later date if they really insist on delisting CMA. If that is the case, you might be holding unlisted shares in CMA if you didn't accept the delisting offer and the delisting resolution is passed.

But I guess I am presenting too many possibilities. Let us take one step at a time.

[oys-ter]

Actually, compulsory acquisition works both way. The offeror can exercise the right to compulsory acquire minority shareholders shares when the offeror hold more than 90%. However, minority shareholders can exercise their rights to require the offeror to acquire their share at the offer price what that happen.

Good point but I can't remember this technicality exist in Singapore or elsewhere but my friend tells me Caymen rules are different due to different Companies Act. So we do have to be careful of the domicile of the takeover vehicle, or even the listed entity.

Actually, this can be found in most offer document under the compulsory acquisition section. An example would be the compulsory acquisition section in Chemoil offer document as below:

In addition, pursuant to Section 700 of the New Companies Ordinance, if the Offeror (together with its associates and nominees) acquires, by virtue of valid acceptances of the Exit Offer2, some but not all of the Offer Shares and controls (as defined in Section 700 of the New Companies Ordinance) at least 90 per cent. in number of all the Shares before the Closing Date, the holder of any Offer Shares who has not accepted the Exit Offer on or before the Closing Date has the right to require the Offeror to acquire its Offer Shares on the same terms as those offered under the Exit Offer or on such other terms as may be agreed, or as the Hong Kong court, on the application of the holder of the Offer Shares or the Offeror, thinks fit to order.

I believe most people are unaware of the second part of the compulsory acquisition act.

[specuvestor]

^^ Yes my point is that different jurisdiction has different Companies Act equivalent, Chemoil domicile is HK under HK jurisdiction.

Okie. CK Tang a bit OT here since this is about CMA. So, let me look at CMA instead.
For CMA, they have used a company, Sound Investment Holdings Pte. Ltd., a wholly-owned subsidairy of CapitaLand to make the offer. So, Companies Act applies here. Very straight forward.

The offeror, Sound Investment Holdings Pte. Ltd. owns zero shares before they made the offer. So, it is very clear that to compulsory acquire all the remaining CMA shares out there, they need 90% of all the offer shares. But wait, concert parties (aka CapitaLand and friendly parties) already own more than 65% of the offer shares. The offer is also conditional on the offeror and its concert parties carrying more than 90% of the voting rights as at the close of the Offer.

The Offeror reserves the right to waive the Acceptance Condition or reduce such condition to a
level below more than 90% (but in any event above 50%) of the voting rights attributable to all
Shares in issue as at the close of the Offer, subject to the approval of the Securities Industry
Council of Singapore (“SIC”).

Assuming that the offeror did not waive or reduce the acceptance condition, it is very clear that minorities will not hold delisted shares at the end of the offer. If the offeror gets more than 90% at the close of the offer, they will execute the compulsory acquisition to acquire all the remaining shares out there from non-accepting shareholders and proceed to delist CMA from SGX. If the offeror does not get more than 90% at the close of the offer, all the shares will be returned back to shareholders and CMA will continue to be listed, with CapitaLand and friendly parties holding more than 65%.

But if the offeror waive or reduce the acceptance condition (subjected to SIC approval), then we might have a case whereby CMA continue to be listed but CapitaLand and friendly parties holding say more than 70%, 80% etc if they could not get enough acceptance to execute the compulsory acquisition. CMA will continue to be listed but of course the offeror can come back with voluntary delisting resolution at a later date if they really insist on delisting CMA. If that is the case, you might be holding unlisted shares in CMA if you didn't accept the delisting offer and the delisting resolution is passed.

But I guess I am presenting too many possibilities. Let us take one step at a time.

yes GLC is much simplier as they do not have funny vested interests to do funny things. Sorry for the OT which was primarily to repond to yawnyawn

I'm sure CAPL purpose is simply to privatise CMA FULLY hence the 90% conditional offer and make it palatable as well. Maybe I'm wrong but I cannot think of a delisted GLC with minorities.

So i sold u a company for 212M, watch it grew almost 30%+ (while it gave u "pathetic" dividends). Now, i want to buy it back from you at 222M. What do you think?

It is a 1.5% coupon bond

And minorities cannot say they are being marginalised

Well packaged

[egghead]

I'm just puzzled why there remains a large sell queue at $2.20. Shouldn't CapitaLand mop up those shares?

[MINX]

I'm just puzzled why there remains a large sell queue at $2.20. Shouldn't CapitaLand mop up those shares?

I,m equally puzzled why people are selling at 2.19 when the offer by CAPL is $2.22

[opmi]

I'm just puzzled why there remains a large sell queue at $2.20. Shouldn't CapitaLand mop up those shares?

I,m equally puzzled why people are selling at 2.19 when the offer by CAPL is $2.22

Coz the Offer is CONDITIONAL upon getting 90% acceptance. If cannot get 90%, they return your shares to you....

[kikababoo]

I'm just puzzled why there remains a large sell queue at $2.20. Shouldn't CapitaLand mop up those shares?

I,m equally puzzled why people are selling at 2.19 when the offer by CAPL is $2.22

Coz the Offer is CONDITIONAL upon getting 90% acceptance. If cannot get 90%, they return your shares to you....

THere's also time factor. If you tender your shares you don't get paid immediately as well. And as what opmi mentioned, there's a chance the deal might not go through, and the share price will fall back to 1.7ish.

[egghead]

My thinking goes like this:

CapitaLand wants to privatize CMA with 100% ownership. They make an offer putting 90% acceptance as a condition. This condition is understandable as hitting 90% will allow it to compulsorily acquire the rest and delist. If that is the case, shouldn't CapitaLand help itself by mopping up whatever share available in the open market selling for below the $2.22 offer? The more it acquires, the closer it gets to the 90%. Why not help itself?

On the sell side, I can understand sellers selling below $2.22 - it is a discount they are willing to accept for taking a non-conditional offer by the market plus of course they can immediately deploy the proceeds 3 days later; rather than wait for 1-2 months with no certainty of a deal.

[MINX]

My thinking goes like this:

CapitaLand wants to privatize CMA with 100% ownership. They make an offer putting 90% acceptance as a condition. This condition is understandable as hitting 90% will allow it to compulsorily acquire the rest and delist. If that is the case, shouldn't CapitaLand help itself by mopping up whatever share available in the open market selling for below the $2.22 offer? The more it acquires, the closer it gets to the 90%. Why not help itself?

On the sell side, I can understand sellers selling below $2.22 - it is a discount they are willing to accept for taking a non-conditional offer by the market plus of course they can immediately deploy the proceeds 3 days later; rather than wait for 1-2 months with no certainty of a deal.

Seriously, is the $2.22 offer price that compelling? Personally, I would prefer to hold onto the shares for long term capital gain. This is a growth stock with potential far exceeding the offer price. Otherwise would CAPL make such a move? Also bear in mind the divestment of 60% share in Westgate office building netting it a $90M profit.

[Temperament]

My thinking goes like this:

CapitaLand wants to privatize CMA with 100% ownership. They make an offer putting 90% acceptance as a condition. This condition is understandable as hitting 90% will allow it to compulsorily acquire the rest and delist. If that is the case, shouldn't CapitaLand help itself by mopping up whatever share available in the open market selling for below the $2.22 offer? The more it acquires, the closer it gets to the 90%. Why not help itself?

On the sell side, I can understand sellers selling below $2.22 - it is a discount they are willing to accept for taking a non-conditional offer by the market plus of course they can immediately deploy the proceeds 3 days later; rather than wait for 1-2 months with no certainty of a deal.

Seriously, is the $2.22 offer price that compelling? Personally, I would prefer to hold onto the shares for long term capital gain. This is a growth stock with potential far exceeding the offer price. Otherwise would CAPL make such a move? Also bear in mind the divestment of 60% share in Westgate office building netting it a $90M profit.

i think in this case the only reason to sell is you need the money or you have better idea with the money.