Minority shareholders approve ARA buyout

At a shareholder meeting yesterday, 81.16 per cent of shareholders present and voting in person or by proxy were in favour of the buyout through a scheme of arrangement, said ARA.
At a shareholder meeting yesterday, 81.16 per cent of shareholders present and voting in person or by proxy were in favour of the buyout through a scheme of arrangement, said ARA.PHOTO: ARA ASSET MANAGEMENT

Court approval remains last step in firm's bid to delist from SGX

ARA Asset Management has moved a major step closer to being delisted from the local bourse.

Founder and group chief executive John Lim - who is leading a group of investors to take ARA private - has received the green light from most of the shareholders.

Court approval is now all that stands in the way of privatising ARA, which was listed on the SGX in 2007 and has built a diversified asset management portfolio across the Asia Pacific, managing about $35.6 billion in assets as at Dec 31.

After a shareholder meeting yesterday, the firm said 81.16 per cent of shareholders present and voting in person or by proxy were in favour of the buyout through a scheme of arrangement - representing 98.64 per cent of the shares by votes.

These are above the thresholds of at least 75 per cent of the value of shares of the voting shareholders, and more than half of shareholders being present and voting in person or by proxy, required for the scheme to be approved.

Athena Investment Company (Cayman), a special purpose vehicle, offered shareholders $1.78 in cash for each ARA share, a deal that values the firm at $1.775 billion.

At $1.78 a share, the offer price is at a premium of 26.2 per cent to the stock's Nov 2 closing price of $1.41.

The consortium of investors comprises existing shareholders - Mr Lim, the Straits Trading Company and Cheung Kong Property Holdings - and two new partners, American private equity firm Warburg Pincus and China's Avic Trust.

"We will now seek approval from the High Court of Bermuda for the sanction of the scheme. ARA is now one step closer to our proposed privatisation, which will allow us to access a deeper capital base and further our growth opportunities," said Mr Lim yesterday.

Should the court sanction the scheme, it will become "effective and binding" and ARA will be delisted from the Singapore Exchange, ARA and Athena Investment said in a stock exchange filing yesterday.

The potential delisting date is set for late next month, after payment of the scheme consideration, they added.

If the acquisition goes through, Warburg Pincus will become the largest shareholder in ARA, with a 30.72 per cent stake, followed by Avic Trust, with 20.48 per cent.

This will leave Mr Lim's JL Investment Group with 19.85 per cent, while Straits Trading Company will hold 20.95 per cent and Cheung Kong Property 8 per cent.

A version of this article appeared in the print edition of The Straits Times on March 24, 2017, with the headline 'Minority shareholders approve ARA buyout'. Print Edition | Subscribe