- POSTED: 18 Sep 2013 23:27
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With stricter listing criteria, more individuals or groups may be looking for opportunities to take control of listed companies -- one way to do this is through a partial offer.
SINGAPORE: With stricter listing criteria, more individuals or groups may be looking for opportunities to take control of listed companies.
And one way to do this is through a partial offer.
Some examples in the last two weeks include partial offers for Health Management International and Ramba Energy.
The corporate takeover of Fraser and Neave last year saw the conglomerate's beer business sold to Dutch brewer Heineke, and its soft drinks and property arm going to Thai Beverage.
It was one of the most long-drawn battles in recent corporate history.
But experts said more deals this year are taking on a friendlier tone.
Robson Lee, a partner at ShookLin & Bok, said: "There's an increasing trend of partial offers or white knights just going for a whitewash (waiver) without making any offer, because there are companies which are not doing well, they're in the sunset industry. The threshold and the listing criteria for Mainboard companies -- they are a lot (more) stiff and harder to comply (with). So it makes sense for people to take control of listed companies which are not doing well."
Experts said that in many of these partial offers, the offerors are welcomed by the companies' management.
They could be investors that have been invited by the company's management to help in restructuring and could be seen as white knight investors that will provide a boost to the company's share price and strategy.
Over the past two weeks, Indonesia-listed Sugih Energy has made a partial offer for 51 per cent of Ramba Energy, while private firm Nam See Investment is seeking to raise its stake in Health Management International to just over 52 per cent.
Ong Wei Jin, a partner at Harry Elias, said: "When a shareholder holds between 30 and 50 per cent of the shares in a company, he is prevented from increasing his stake by more than 1 per cent every six months. So a person who wishes to have better control of the company but still (wants) to retain the company as a listed vehicle will try to use a partial offer instead.”
But these white knights are not restricted to just partial offers.
Early this month, Indonesian instant noodle maker Indofood was widely seen as a white knight investor when it launched a full takeover bid for vegetable processor China Minzhong.
China Minzhong was under attack by a short seller but its share price recovered when investors learnt it had Indofood's support.