SINGAPORE (THE BUSINESS TIMES) - A vehicle wholly owned by Hi-P International's chief executive officer (CEO) and controlling shareholder Yao Hsiao Tung has made a voluntary unconditional general offer for all the shares of mainboard-listed Hi-P International, other than shares already held by the offeror.
According to an exchange filing on Friday morning (Dec 18), the offer price is $2 per share, and the offer is being made with a view to delist the company from the Singapore Exchange (SGX).
The offer price represents a premium of around 13.6 per cent over the last transacted price of $1.76 on Dec 14, the last full market day shares were traded, and a 160.1 per cent premium to net asset value per share as at June 30, 2020.
The premium is also around 23.2, 42.3, 50.6 and 62.5 per cent over the volume-weighted average price per share for the one-month, three-month, six-month and 12-month periods up to and including the last trading day respectively.
"The offer price represents an opportunity for shareholders to realise their entire investment in cash at a favourable valuation amid prevailing economic uncertainty driven by the ongoing Covid-19 pandemic and low trading liquidity in the shares," the offeror said.
The offeror does not intend to revise the offer price of $2 per share, but noted it reserves the right to do so if a competitive situation arises.
As the offer is unconditional in all respects, shareholders who accept the offer will receive payment of the offer price within seven business days of receipt of their valid acceptances by the offeror.
Mr Yao, who is also chairman of Hi-P, is an existing controlling shareholder of the company, holding around 83.4 per cent of the total shares as at the offer date. His wife, Wong Huey Fang, holds around 0.1 per cent of Hi-P shares. They have provided irrevocable undertakings to accept the offer.
The offer is being made with a view to delist Hi-P, and the offeror said it intends to exercise its rights of compulsory acquisition under the Companies Act, if and when entitled.
It said privatising the company will give the offeror and the management more flexibility to manage the business of the company, and optimise the use of its management and capital resources as well as facilitate the implementation of any operational changes. Delisting will also allow the company to save on expenses relating to the maintenance of its listed status.
The company has not carried out any corporate exercise to raise funds on SGX since 2004, it added. "The offeror is of the view that the company is unlikely to require access to Singapore capital markets to finance its operations in the foreseeable future."
In response to the offer, the board of directors of Hi-P said separately on Friday it will be appointing an independent financial adviser (IFA) to advise the directors of the company who are considered independent for the purposes of the offer. The appointment will be announced in due course.
A circular containing the advice of the IFA and recommendation of the independent directors will be issued by the company to shareholders within 14 days from the despatch of the offer document.
CLSA Singapore and DBS Bank are the joint financial advisers to the offeror.
Hi-P shares last traded at $1.81 on Dec 15, before a trading halt was called. The trading halt was lifted on Friday morning.