SINGAPORE (THE BUSINESS TIMES) - Sin Ghee Huat Corporation on Thursday (April 29) announced that HHH Co, an investment holding company, intends to make a voluntary conditional cash offer for all the issued and paid-up ordinary shares of Sin Ghee Huat at 27 cents per share.
This would value the company at about $60 million. As at Sin Ghee Huat's closing price of 22 cents on Thursday, its current market capitalisation stands at $48.84 million.
HHH Co, which is owned by Mr Low Chui Heng and Mr Low Ah Hoo, holds some 44.76 million shares, or a 20.16 per cent stake, in the company.
This indicates a total cost of about $47.86 million for the offer, should all shareholders choose to accept it. Sin Ghee Huat has a total of 222 million issued shares as of Thursday.
Meanwhile, Mr Low Chui Heng and Mr Low Ah Hoo, being concert parties of HHH Co, along with 2GS Investment and certain existing shareholders, have provided undertakings to HHH Co to tender all of their respective shares in acceptance of the offer. In total, they hold about 47.33 per cent of the overall issued shares.
The offer is conditional upon HHH Co and its parties acting in concert with it, achieving shareholding of more than half of the shares as at the close of the offer.
The offer price of 27 cents exceeds the highest closing price of the shares in over two years preceding April 20, representing a premium of 58.8 per cent, 59.8 per cent and 48.4 per cent over the volume-weighted average price per share for both the one-month and three-month periods, as well as six-month and 12-month periods respectively.
In a bourse filing, DBS Bank, acting as the financial adviser to HHH Co, noted that the offer price "represents an opportunity for shareholders to realise their investment in the shares at a premium to historical market prices without incurring brokerage and trading costs amidst the uncertainties surrounding the long-term impact of the Covid-19 pandemic and a challenging outlook across the company's businesses".
Additionally, the offer also provides shareholders with an opportunity to realise their entire investment in the shares which may not otherwise be readily available to shareholders, given its low trading liquidity, DBS said.
Should HHH Co receive sufficient valid acceptances, it also intends to exercise its rights of compulsory acquisition and subsequently delist Sin Ghee Huat from the Singapore Exchange Securities Trading.
It believes that privatising the company "will provide the offeror and the company with greater control and management flexibility to manage the business of the group, respond to the changing market conditions and optimise the use of the company's management and resources".
The offer price is final, and HHH Co does not intend to revise it.
Shares of Sin Ghee Huat closed flat at 22 cents on Thursday, prior to the announcement.