Sias calls for NeraTel shareholders to reject privatisation offer
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Mr David Gerald, founder and CEO of the Securities Investors Association (Singapore), said its recommendation is the same as that of the appointed independent financial adviser and NeraTel’s independent directors.
ST PHOTO: CHONG JUN LIANG
Ry-Anne Lim
SINGAPORE – Taiwan-listed Ennoconn Corp’s bid to acquire Nera Telecommunications (NeraTel) at 7.5 cents a share is being met with opposition, with the Securities Investors Association (Singapore), or Sias, advising shareholders to reject the offer.
In a statement on the evening of Oct 9, Sias founder and chief executive David Gerald pointed out that this sentiment was shared by both the appointed independent financial adviser (IFA) SAC Capital – which believed that the price was “not fair and not reasonable” – and NeraTel’s independent directors.
The word “mandatory” in the offer description does not mean that all shareholders are legally obliged to accept the offer, he added.
“Everyone is perfectly entitled to hang on to their shares if they so wish, this being all the more so, given the advice of the IFA.”
Furthermore, Ennoconn had emphasised in its offer that it will not revise its price, that it does not expect to exercise any rights of compulsory acquisition and that it intends to retain NeraTel’s listing status.
Sias’ recommendation is therefore the same as that of the IFA and the independent directors – that “shareholders should reject the offer”, said Mr Gerald.
Ennoconn’s mandatory offer to acquire the remaining shares in NeraTel that it does not already own was announced earlier in September.
This came after Ennoconn entered into a share purchase agreement with Asia Systems for the purchase of close to 193.2 million shares in the issued and paid-up ordinary share capital of NeraTel for 7.5 cents per share. This represents nearly 53.4 per cent of the total number of shares in NeraTel.
As Ennoconn acquired more than 50 per cent of NeraTel’s shares, a mandatory unconditional cash offer for the remaining shares it does not own was triggered.
The 7.5 cents offer price was a 5.1 per cent discount to the volume-weighted average price (VWAP) of the shares traded in the month prior to the offer, and a 3.8 per cent discount to the VWAP of the shares traded in the three-month period prior to the offer.
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