Succession planning gathered pace as owners of retailing firm C.K. Tang sold their majority stake to investment holding company Tang Holdings, triggering a general offer for all the shares of the firm.
C.K. Tang - famed for its Orchard Road department store Tangs - was delisted in 2009 and controlled by brothers Tang Wee Sung, 63, and Tang Wee Kit, 61, before they sold their shares to Tang Holdings for 34.967 cents a piece on Wednesday.
The investment holding firm now holds 98.15 per cent or about 232.6 million shares of C.K.Tang.
Tang Holdings, a private company, is owned and controlled by the Tang brothers, who are directors of the firm. Other directors include Mr Tang Wee Kit's eldest son, Sean Tang Wen-Wei, 31.
In the offer announcement issued on Wednesday, Tang Holdings said: "(Mr Tang Wee Sung) has decided that the final step to complete the family succession planning exercise is appropriate at this time, hence the sale of shares by the brothers either personally or through their respective vehicles to the offeror."
This, it added, completes the family succesion planning exercise, initiated by the Tang brothers in May 2006, to ensure that the shares remained in the family.
Having acquired more than 30 per cent of the shares through the transaction, Tang Holdings is required to make an unconditional mandatory cash offer for all the shares under the Take-overs and Mergers Code.
It is offering 35 cents a share to buy out the remaining shares that it it does not already own. The Straits Times understands the other 1.85 per cent stake in C.K. Tang is held by over 500 minority shareholders.
The offer price at 35 cents is way below the firm's net tangible assets of $1.54 per share as at the end of March last year.
This is the fourth general offer to buy out all the shares of C.K. Tang, including three delisting attempts previously. The third try in 2009 was successful, with an exit offer of 83 cents per share.
In 2011, C.K. Tang proposed to cancel the remaining shares held by minority investors at $2 per share via selective capital reduction - rejected by shareholders.
Tang Holdings stressed in the announcement that the offer is "being made solely to comply with the mandatory general offer provisions" under the take-over code, triggered by sale of shares by the Tang brothers as part of the family succession exercise.
Following the announcement, C.K. Tang is expected to engage an independent financial adviser to assess the offer and advise the minority shareholders accordingly.
