SINGAPORE – Mainboard-listed Golden Energy and Resources (Gear) has come up with an improved all-cash exit offer to shareholders in its privatisation bid.
Under the new terms, the exit offer is now 13 per cent higher at 18.1 cents.
Those opting for an all-cash payout will get an additional 79.2 cents representing the in-specie distribution of 1.3936 shares in Indonesia-listed thermal coal producer Golden Energy Mines (Gems), in which Gear has a 62.5 per cent stake.
In total, the 97.3 cents all-cash offer is 15 per cent higher than its original total offering of 84.6 cents.
However, those opting for Gems shares-plus-cash will have to settle for 96.4 cents in total value, some 7.8 per cent lower than the original offer of $1.045. The company said this is on account of the fall in Gems’ share price and the appreciation of the Singapore dollar against the Indonesian rupiah.
Retail shareholders in Singapore are most likely to opt for the all-cash offering.
This is a premium of approximately 23 per cent, 44.6 per cent, 48.3 per cent and 63.8 per cent over the volume-weighted average price (VWAP) of Gear’s shares for the one-month period, three-month period, six-month period and 12-month period respectively.
It is also higher than the price of the stock on its last day of trading on Oct 7, 2022, and when the company announced its acquisition three days later.
In addition, while the Gems shares-plus-cash offer is 7.8 per cent lower than the original offer price, it is still a premium of approximately 21.9 per cent, 43.2 per cent, 47 per cent and 62.3 per cent over the VWAP for the one-month period, three-month period, six-month period and 12-month period respectively, and including the last trading day of the stock.
The revised offer comes after shareholders criticised Gear – which is 77.5 per cent-owned by Indonesia-listed Dian Swastatika Sentosa, which is in turn 59.9 per cent-owned by Sinar Mas Tunggal – for allegedly putting out an initial “lowball” privatisation offer.
This prompted the Securities Investors Association (Singapore), or Sias, to step in earlier in March. The Singapore Exchange Regulation has also entered the fray to remind Gear’s board to ensure that its independent financial adviser (IFA), W Capital, pays attention to appropriate valuation methods and “assumptions that can withstand scrutiny”.
In particular, shareholders complained that in its original offer, Gear did not take into account the steep rise in the value of its Australian assets – Stanmore and 50 per cent-owned gold miner Ravenswood Gold Group. The listed market values of both companies have risen by more than 20 per cent over the past six months, adding significantly to the underlying value of Gear.
It remains to be seen what the IFA proclamation on the latest deal will be, and whether shareholders and Sias will give a nod to the latest offer.
The long-stop date for the satisfaction of exit conditions has been extended from April 9 to Aug 9, 2023. The extension of requirement to get shareholder approval at an extraordinary general meeting is July 9.