Bid to take Tat Hong private launched

Privatising crane supplier Tat Hong will yield more managerial flexibility and allow a better use of resources, says THSC Investments.
Privatising crane supplier Tat Hong will yield more managerial flexibility and allow a better use of resources, says THSC Investments.PHOTO: TAT HONG HOLDINGS

Firm's CEO and StanChart Private Equity put in pre-conditional offer at 50 cents a share

Speculation about a takeover of Tat Hong Holdings can now be laid to rest, with news that a buyout offer has been tabled.

Tat Hong chief executive and managing director Roland Ng and Standard Chartered's private equity arm have launched a privatisation bid for the mainboard-listed crane supplier at 50 cents a share.

A pre-conditional offer announcement released late on Thursday cited Tat Hong's low trading volume and the compliance cost of maintaining a listed status as reasons behind the bid.

The offering vehicle, THSC Investments, also believes that a privatised Tat Hong will yield more managerial flexibility and allow a better use of resources, the document said.

However, THSC Investments - which is jointly owned by Standard Chartered Private Equity (Singapore), or SCPE, and Mr Ng's TH60 Investments - said that it does not intend to make major changes to Tat Hong's business or its deployment of fixed assets for now, beyond the ordinary course of business.

It has secured undertakings from shareholders with 59.74 per cent of Tat Hong's shares.

The offer will turn unconditional if it manages to get a stake of at least 90 per cent, as that would allow for the compulsory acquisition of the remaining shares.

THSC is also waiting for a number of pre-conditions to be met before launching a formal offer, including obtaining approval from the relevant authorities in Australia and China by July 11.

If the bid goes through, the family of Mr Ng will control about 68.8 per cent of the vehicle making the offer.

SCPE will hold the remaining 31.2 per cent of the offeror.

The offer price represents a premium of 29.9 per cent over Tat Hong's closing share price of 38.5 cents on Sept 20 last year.

That day has been dubbed the last undisturbed trading date, before investors were thrown into a tizzy over the chatter of a potential buyout.

The offer is also an 8.7 per cent premium over the last traded price of 46 cents on Nov 9.

That was the last full market day before Tat Hong confirmed that it had received a non-binding letter from SCPE about the private equity unit's proposal to acquire shares at 50 cents each.

The company's disclosure at the time came on the heels of a Bloomberg report that SCPE might have been looking to acquire a 29 per cent stake in Tat Hong.

Tat Hong's latest results showed it stayed in the red in the second quarter.

However, losses narrowed to $2.79 million for the three months to Sept 30 - a 48 per cent drop from the year before.

The counter closed 7.8 per cent higher at 48.5 cents on turnover of 7.9 million shares yesterday.

A version of this article appeared in the print edition of The Straits Times on January 13, 2018, with the headline 'Bid to take Tat Hong private launched'. Print Edition | Subscribe