SINGAPORE - Hyflux controlling shareholder Olivia Lum must make a general offer for the water treatment company's consumer business after the completion of a dividend in specie distribution, according to the Securities Industry Council (SIC).
Under the dividend in specie, as opposed to a cash dividend, Hyflux is planning to distribute 70 per cent of the shares in HyfluxShop Holdings to Hyflux's existing shareholders on the basis of one HyfluxShop share for every 10 Hyflux shares held, for free.
Hyflux, which is undertaking the distribution as part of plans to list HyfluxShop, will retain the remaining 30 per cent stake in HyfluxsShop.
Ms Lum, who is chief executive and chairman of Hyflux, had offered to buy any unlisted HyfluxShop shares from Hyflux shareholders at 17.83 Singapore cents per HyfluxShop share, provided her direct shareholding in HyfluxShop did not exceed 29.99 per cent.
Hyflux and Ms Lum, who holds a 34.05 per cent stake in Hyflux, would together hold about 53.8 per cent of HyfluxShop shares after the distribution. That would oblige Ms Lum to make a general offer for HyfluxShop shares she does not already hold under Singapore's takeover code, although the SIC, which oversees takeovers in Singapore, can grant a waiver.
But SIC gave a verbal ruling on Jan 31 that Ms Lum will be obliged to make an offer for HyfluxShop if the distribution goes through. As a result, Ms Lum is now prepared to make a general offer for HyfluxShop after the distribution, and her offer to purchase HyfluxShop shares will not be capped once her general offer is launched.
Ms Lum will offer 17.83 Singapore cents per HyfluxShop share, matching the partial offer she had made as part of the in specie distribution and the distribution valuation of the HyfluxShop shares.
Hyflux shareholders met on Thursday afternoon to vote on the in specie distribution.