Platform in talks to relist Income shares as some shareholders express uncertainty over Allianz deal

SINGAPORE - Alta Exchange is in early discussions to explore the possibility of relisting Income Insurance shares on its trading platform, a move which could bring relief to close to 16,000 retail shareholders holding 28 million shares of the local insurer. 

The digital securities exchange was earlier ordered by Income to cease this service by Oct 17, in the light of German insurer Allianz’s

offer to buy a majority stake in Income at $40.58 a share in cash.

But the deal has now been

blocked by the Government over concerns

about its structure and Income’s ability to continue its social mission. 

Some mom-and-pop shareholders – many of whom are seniors – say the latest development has left them uncertain about how to sell their shares.

Income shares are not available to trade in public markets as the insurer is not listed.

Alta’s exchange arm, AltaX, offers an alternative avenue for accredited retail shareholders to sell their Income shares to a network of global institutional and accredited investors. Otherwise, they have to go through the tedious task of finding willing buyers themselves. 

“Alta Exchange is in early discussions to explore the possibility of relisting Income Insurance tokens on AltaX. We will share updates on this in due course,” said a spokesman. 

While Alta will delist Income shares from its platform as planned on Oct 17, off-exchange trades can still be facilitated beyond this date, it said.

The exchange is now in talks with Income and local brokerage Phillip Securities, a unit of wealth management firm PhillipCapital, to work towards relisting the shares at a later date.

In July, Alta was informed by Income that it had three months’ notice to suspend trading of the insurer’s shares by Oct 17. 

This came after German insurer Allianz said on July 17 that it planned to buy at least 51 per cent of Income in a $2.2 billion cash deal. The offer was subject to regulatory approval and had been expected to close in the fourth quarter of 2024 or the first quarter of 2025.

The Straits Times understands that investors expressed interest to Alta about buying some $5 million worth of Income shares following Allianz’s planned offer.

They comprise institutional and individual investors, as well as family offices that manage the wealth of the super rich. These investors were looking to buy the shares at an average of 25 per cent discount to Allianz’s offer. 

But on Oct 14, the Singapore Government blocked the proposed Allianz-Income transaction.

Mr Edwin Tong, the Minister for Culture, Community and Youth, told Parliament about the need to safeguard public interest before a deal can be approved.

This led to a new wave of inquiries from investors asking Alta about the availability of Income shares on its platform. 

“Private market deals are complex and unpredictable. With the Income Insurance Share Liquidity Program, along with our partners at Phillip Securities, we are honoured to be able to provide a clear and streamlined solution, giving investors a window for liquidity and access to one of Singapore’s leading insurance providers,” said Alta.

Mr Michael Ong, an Income shareholder, was hoping for some capital gains from his investment: “Income shares are not listed on the Singapore Exchange. It is difficult to sell them.

“No choice now (but to) continue to hold. At least the dividends collected over the last 20 years are more than my capital outlay. I will just have to wait and see,” he said.

Mr Eric Tan, a financial service consultant, voiced his concerns over the future of Income now that the deal has been blocked. He fears it will pose challenges for Income as it seeks to gain a firmer foothold in a competitive market. 

“The decision not only underscores the intricate balance between financial viability and upholding social missions but also prompts a deeper reflection on the strategic direction and operational resilience of Income,” Mr Tan said on LinkedIn. 

“While the road ahead may hold uncertainties and complexities, it also presents opportunities for recalibration, innovation and strategic realignment to ensure sustainable growth and impact in the ever-evolving financial landscape,” he added.

Mr Kanishka de Silva, a director in credit rating firm Fitch Ratings’ Asia-Pacific insurance team, said the Government’s halt on the Allianz-Income deal highlights the importance it places on the continuation of Income’s social mission.

“We believe it will be key for a potential acquirer or acquirers to demonstrate that they will address any concerns that the Government or regulators may have around this. We don’t expect this development to affect the market’s competitive dynamics as the proposed acquisition would have only consolidated existing market positions rather than disrupt them,” he said.

The deal would have further strengthened Income’s market-leading position in the fragmented non-life sector, noted Mr de Silva. However, the life insurance sector will continue to be dominated by the five biggest insurers, including Singapore’s Great Eastern and the subsidiaries of global insurance groups.

Allianz said on Oct 14 that it will consider revisions to the proposed transaction structure and will assess the situation with Income and its parent NTUC Enterprise.

Income and NTUC Enterprise also said they will work closely with relevant stakeholders to decide on the next course of action.