Second Chance nears privatisation with founder and family holding 97.45% of shares

SINGAPORE - In a move which brings it within a whisker of full privatisation, the founder of Singapore-listed Second Chance Properties and his family have amassed 97.45 per cent or 904.10 million shares of the company as at Aug 23.

This comes just two weeks after their privatisation vehicle Final Chance Holdings accumulated 91.18 per cent of the company’s shares as at Aug 6, a threshold which saw the stock lose its free float status on the Singapore Exchange.

Second Chance founder and chief executive officer Mohamed Salleh Marican, his family and related parties already controlled some 86.2 per cent of the company before the privatisation offer was launched on July 10.

Final Chance Holdings is now working to acquire another 10.9 million of the 23.7 million holdout shares to pass the threshold for full privatisation.

Under the Singapore Exchange’s delisting rules, an offeror is required to acquire more than 75 per cent of outstanding minority shareholdings beyond what family and related parties own – which in Second Chance’s case was 86.2 per cent prior to the offer.

Minority shareholders who are holdouts at this point – now that the company has passed the 90 per cent free-float loss threshold – risk ending up as shareholders of a privatised company.

The closing date for the offer has been extended to Sept 9, two weeks beyond the original closing date of Aug 26.

Final Chance reiterated on Aug 23 that its offer price of 30 cents per share is final.

Second Chance will subsequently be delisted from the SGX.

Citing low liquidity and undervaluation, Mr Salleh and his family launched their bid to take the company private via a voluntary unconditional offer.

As at July 10, the company has an issued and paid-up share capital of about $174.7 million, comprising 927.8 million shares.

The 30 cents per share offer price represents a premium of about 39.5 per cent over Second Chance’s traded price of 21.5 cents on July 9, the last full trading day before the offer announcement.

It also represents premiums of about 40.8 per cent, 37 per cent, 33.3 per cent and 28.2 per cent over the one-month, three-month, six-month and 12-month volume-weighted average prices respectively, up to and including the last trading date.

Independent financial adviser Zico Capital has advised the company’s independent directors to recommend that shareholders accept the offer, which it deems “fair and reasonable”.

The offeror has stated that the company would continue to develop and grow its existing businesses, primarily in financial investments and commercial property.