SINGAPORE - The Securities Investors Association Singapore (SIAS) has approached the board of GMG Global over shareholder concerns around a potentially unfair acquisition offer.
The rubber plantation operator is in the process of being acquired by Halcyon Agri Corporation through a deal involving two parts.
It will first seek to acquire the 51.12 per cent stake controlled by Sinochem International for S$210 million. The rest of the 48 per cent stake held by minority shareholders will be acquired through a proposed share swap that values GMG at 70 Singapore cents a share and Halcyon at 75 Singapore cents a share.
In a statement released on Wednesday (April 27), SIAS questioned the rationale behind these valuations, given that GMG's net asset value was 93.42 cents a share as at the end of 2015, over three times that of Halcyon at 29.84 Singapore cents a share.
There is also no clarity on how the proposed S$210 million offer to Sinochem was arrived at, SIAS added.
SIAS highlighted these concerns to independent directors Ong Kian Ming and Tay Puan Siong in a meeting on Wednesday.
"The independent director of GMG informed SIAS that the current offer is a proposal only and the board would be appointing an independent financial adviser (IFA). Nevertheless, the deal would require regulatory approval," SIAS noted, citing the GMG directors' response.
"Further, the minority shareholders of GMG will have the opportunity to vote on the proposal in due course.
"SIAS urged the GMG board to address the concerns of the minority shareholders at tomorrow's annual general meeting. We recommend shareholders to wait for the IFA report before making any decision regarding their shares."