TIH gets S$63.1m voluntary unconditional offer from Lippo unit, majority shakeholder

SINGAPORE - Hedge fund Argyle Street Management could be getting a new partner in Singapore-listed fund TIH Ltd, where it now holds a majority stake.

It has joined forces with Lippo China Resources, to make a voluntary unconditional offer for all of the shares in TIH, which was formerly Transpac Industrial Holdings.

The offer price is S$0.57 a share, TIH said in a Singapore Exchange announcement late on Monday night (Jan 8) - a premium of 12.87 per cent over the latest closing price of S$0.505.

Based on Argyle Street Management's present 54.2 per cent stake in TIH, this offer would work out to about S$63.12 million in all for the remaining shares.

The offer for each share would comprise 12.5 Singapore cents paid in cash and 44.5 Singapore cents paid by the issue of a three-year senior unsecured 2.25 per cent note.

Interest payable on the offeror notes brings the consideration for the deal up to around S$66.6 million, the Hong Kong-listed Lippo China Resources and Lippo Ltd said in a Tuesday morning filing on the Stock Exchange of Hong Kong.

Lippo China Resources is a 75 per cent owned unit of Lippo Ltd.

The bid vehicles and their parent firms may transfer TIH shares among themselves after the close of the offer, according to the offer document.

Such transfers, if made, would be done at the offer price and completed within 12 months of the offer close.

Argyle Street Management said that it struck the deal because some of the funds that it manages are maturing and it is "under a duty to provide the investors in such funds an opportunity to exit in an orderly manner".

On top of that, some of its investors would prefer to divest certain illiquid holdings from the fund's parties that now have their money in TIH.

But Argyle Street Management "continues to believe in the underlying value of TIH over the long term", the hedge fund added.

It said that the introduction of Lippo China Resources as a shareholder with joint control of TIH "will enhance the ability of TIH to source for investment opportunities, given (Lippo China Resources') extensive access and network to significant strategic players".

Meanwhile, the Lippo group said in its Hong Kong bourse announcement: "TIH, as a well established closed-end fund in Singapore which focused in investment in various sectors in Asia, matches the group's strategy to expand their scope of business in securities and fund investments in Asia."

The joint offerors said that they intend for TIH to keep its listing status in Singapore and to continue with its existing activities, and have no intention of introducing any major changes to the closed-end fund's business.

The offer will remain open for acceptances by TIH shareholders for a period of at least 28 days.

TIH's second-largest shareholder is Transpac Investments, with a roughly 10.2 per cent stake. TIH was formerly managed by Transpac Capital Pte Ltd.