Against all odds, 34 minority shareholders of Tee International have thwarted an attempt by its group chief executive Phua Chian Kin to privatise the property and engineering group.
Mr Phua had offered to buy out shareholders at 21.5 cents a share, via a scheme of arrangement or an all-or-nothing deal.
This would require the approval of 75 per cent of all voting shares at the meeting held at Seletar Country Club yesterday morning.
Of the 190 shareholders who voted, 34 shareholders who together held about 34 million shares out of Tee International's 502 million share base rejected the deal.
The other 156 shareholders voted a combined 102 million shares in favour of Mr Phua's offer, but this 74.84 per cent majority narrowly missed the 75 per cent mark required for his offer to be carried through.
Mr Phua, together with his family members, controls 60.04 per cent of Tee International. They were not allowed to vote yesterday.
The result was a narrow miss for Mr Phua.
Percentage approval of all voting shares required for offer to be carried through. The 156 shareholders with a combined 102 million shares who voted in favour of Mr Phua's offer amounted to a 74.84 per cent majority, narrowly missing the mark.
Retired investor Henry Ho said he was surprised by the result, but happy with the outcome, since he had procured his shares at above the offer price.
Before the vote, shareholders had questioned Mr Phua's motives for taking the company off the public market.
Mr Ho said: "He told us that he is 58 years old and has no more energy."
Another investor, Mr Mano Sabnani, told Mr Phua he disagreed: "If you don't have energy, you should find successors. You are paid for it."
A spokesman for Tee International said that Mr Phua could not immediately respond to queries from The Straits Times as he was not in the office.
Mr Sabnani said that Tee's management did not appear keen to engage shareholders, reminding them instead that it had already held a dialogue with the Securities Investors Association (Singapore) last month.
To be sure, Provenance Capital, the financial adviser to Tee's independent directors, had in July assessed Mr Phua's offer for the company to be "fair and reasonable".
At 21.5 cents a share, the offer price represents a 12 per cent premium to Tee's volume weighted average price per share for the three-month period leading up to the last market day before the offer was made in April.
The 21.5 cents offer price is also 7.5 per cent above the group's net asset value of 20 cents a share as at Feb 28. Tee International owns 63.28 per cent of listed company Tee Land.
If Mr Phua remains keen on delisting, he could consider making a fresh offer for Tee International.
Under Rule 33.2 of the Takeover Code, offerors cannot make a second offer with better terms to any shareholders until six months after their first offer is closed.
However, Mr Phua made his offer by way of a scheme of arrangement. Under a scheme, it is common practice for the offeror to seek an exemption from Rule 33.2.
Since Mr Phua's vehicle Oscar Investment was granted an exemption, it is not bound to a six-month waiting period.
Trading in the counter was halted yesterday pending the results.
The shares last traded at 21 cents last Friday.