Falcon Energy raises offer for CH Offshore; Chuan Hup signals acceptance

SINGAPORE - Falcon Energy Group's offer to swallow its bigger and better-performing associate, CH Offshore, received a decisive boost after it persuaded the CH Offshore's second-largest shareholder to accept an improved offer.

Falcon said it received an undertaking on Feb 9 from Chuan Hup Holdings to accept an improved offer of 55 cents a share, up from 49.5 cents previously.

Chuan Hup owns 24.7 per cent of CH Offshore. When added to Falcon's own 29.1 per cent stake, the offeror will easily cross the majority 50 per cent threshold to make its voluntary offer unconditional.

It had rejected the earlier offer.

Its decision came about a week after an independent financial adviser said that Falcon's offer for CH Offshore was neither fair nor unreasonable.

The adviser, Provenance Capital, suggested in a circular to CH Offshore shareholders that the offer price most likely undervalued the firm.

The turn of events is likely to prod minority shareholders into accepting the 55-cent-a-share offer, given that there is no longer a prospect of a bidding war for CH Offshore.

Falcon said its revised offer is final. The offer closes on Feb 27.