Great Eastern proposes delisting with OCBC's S$900 million offer
Great Eastern is proposing to delist from the Singapore bourse by way of its largest shareholder Overseas-Chinese Banking Corp offering S$900 million (US$700 million) to buy the rest of the insurer it does not already own, according to a joint statement and filings on Friday (Jun 6).
Trading in Singapore-based Great Eastern's shares was suspended on Jul 15, 2024, after its free float fell below 10 per cent following an offer by OCBC to acquire an 11.56 per cent stake at S$25.60 apiece in May 2024.
OCBC, Singapore's second-largest lender, had obtained acceptance from some shareholders and currently owns 93.72 per cent of Great Eastern.
Under the new proposal, it is offering S$30.15 a share for the 6.28 per cent of the insurer's stock that it does not own. The latest offer is 17.8 per cent higher than last year's offer and values Great Eastern at S$14.27 billion.
Independent financial adviser EY has assessed that the offer is fair and reasonable and OCBC does not intend to revise it, according to the statement.
It is OCBC's fourth attempt to fully acquire Great Eastern, following three bids since 2004.
OCBC's 93.72 per cent stake in the insurer still falls short of the threshold needed to delist the company or launch a compulsory acquisition.
Two companies controlled by Lee Thor Seng and his sons - members of the founding family behind OCBC - own nearly 2 per cent of Great Eastern, making them the second-largest shareholders, according to the insurer's annual report.
Wong Hong Sun and Wong Hong Yen hold about 1 per cent, while Palliser Capital, which has criticised the latest takeover bid as unfair to shareholders, owns a 0.27 per cent stake, the report showed.
Great Eastern proposed the delisting after assessing options available to resolve its shares trading suspension. The delisting offer is conditional upon at least 75 per cent backing from minority shareholders. OCBC will not be able to vote.
If delisting cannot be achieved, Great Eastern would seek shareholders' approval on a second proposal to restore its free float by way of a one-for-one bonus issue comprising new listed shares with voting rights, and new non-listed shares without voting rights.
According to the statement, OCBC intends to vote in favour of the bonus issue if the delisting proposal is not approved. OCBC would opt to receive the non-voting shares, which would dilute the bank's shareholding in Great Eastern to 88.19 per cent to help restore the free float and a resumption in trading.
In a statement on Friday evening, the Securities Investors Association (Singapore), or SIAS, said that the revised offer price of S$30.15 represented a "material increase" from the previous offer.
The decision on whether Great Eastern will be delisted "now rests squarely in the hands of shareholders", David Gerald, SIAS founder, president and CEO said.
Great Eastern shareholders who had accepted the earlier offer of S$25.60 will not receive any further compensation, an outcome that Mr Gerald said that SIAS was "disappointed" by.
"GE shareholders who were unable to withstand the trading suspension have ultimately lost out on realising a fair value for their GE shares," he said.
Mr Gerald said that it had been a "prolonged and uncertain period" for shareholders who held on, with extensions sought by Great Eastern. The insurer's shares had been suspended from trading since July 2024, and the suspension has "severely limited" shareholders' abilities to make investment decisions, rebalance portfolios, or exit their positions, he added.
"Throughout this time, shareholders were left without a clear resolution framework or timeline. SIAS urges regulators to further refine the rules to provide stronger safeguards for shareholders in such circumstances."
SIAS advised shareholders to review the terms of the new offer carefully, to weigh them against their individual investment circumstances and objectives, and to make informed decisions accordingly, noting that Great Eastern's measures are designed to bring it back into compliance with the Singapore Exchange's listing rules.
The institution is also preparing to meet with Great Eastern and its shareholders to "explain the implications of the proposed resolutions", Mr Gerald said.
Editor's note: The headline of this article has been amended to correct the value of the offer. We apologise for the error.
