Delong CEO makes cash offer of $7 per share to take steelmaker private

Delong Holdings chief executive and executive chairman Ding Liguo will launch a privatisation bid for the mainboard-listed Chinese steelmaker in a voluntary conditional cash offer of $7 per share, the company announced just after the midday trading break yesterday.

Bid vehicle Best Grace Holdings is making the offer for all the shares that the offeror, its related corporations and their nominees do not already hold, with no intention of revising the offer price or any other terms of the offer.

Mr Ding and his wife Zhao Jing are deemed interested in 75.56 per cent of Delong, with the offer possibly to be funded by bank facilities extended by Deutsche Bank, according to the Singapore Exchange filing released through PrimePartners Corporate Finance.

The announcement added that the offeror intends to delist the company and turn it into a wholly owned subsidiary, but plans to continue with the company's business.

"Shareholders will have an opportunity to realise their investment in the offeree for a cash consideration at a premium above the historical market share prices, without incurring any brokerage and other trading costs," it said, noting that the average daily trading volume of Delong shares has been low.

The offer price marks a 76.9 per cent premium over the stock's 12-month volume-weighted average price, and a 1.9 per cent premium over its last transacted price of $6.87 a share on the day before the announcement.

  • 75.56%

    Stake in Delong Holdings which CEO and executive chairman Ding Liguo and his wife Zhao Jing are deemed to be interested in.

Shares in Delong resumed trading around 2pm yesterday. The company had called for a trading halt before the market opened.

The offer depends on Best Grace getting valid acceptances for 90 per cent of the shares it does not hold, by the close date. Best Grace also reserves the right to revise the condition to a lower acceptance threshold, with the consent of the Securities Industry Council.

No close date was given in the announcement, but the offer will remain open for acceptances for at least 28 days from when the offer document is sent out in two to three weeks' time.

Delong shares closed at $6.95 yesterday.

A version of this article appeared in the print edition of The Straits Times on September 28, 2018, with the headline 'Delong CEO makes cash offer of $7 per share to take steelmaker private'. Subscribe