SMRT shareholders voice concerns over Temasek takeover, Sias to set up meetings
SMRT and Temasek have tapped Sias to arrange meetings with SMRT shareholders. Reuters file photo
SINGAPORE — SMRT shareholders have voiced concerns relating to the proposed privatisation of the transport operator by state-owned investment firm Temasek Holdings, such as why it is taking place via a scheme of arrangement rather than a general offer and whether the offer price is fair to them, investor rights advocate Securities Investors Association Singapore (Sias) said on Thursday (July 28).
In response, Temasek and SMRT reached out to Sias to arrange meetings with SMRT shareholders.
“We welcome the opportunity to engage in a dialogue with Sias, and SMRT shareholders, about this proposed transaction in the lead-up to the scheme meeting later in the year. Subject to regulatory and court approvals, SMRT expects to convene a scheme meeting by October for shareholders (other than Temasek) to vote on the proposal,” Temasek and SMRT said in a joint statement late in the day.
Shareholders will receive a scheme document before the meeting, which will outline the proposal in detail, and seek to address the comments and questions regarding the proposed privatisation of SMRT, they added.
“Shareholders have raised their concerns as to why Temasek is pursuing the privatisation deal through a scheme of arrangement rather than a general offer. Long-term shareholders of SMRT have also asked why no special dividends from the sale of assets of S$991 million under the proposed the New Rail Financing Framework,” Sias said.
It also noted in its statement that the proposed privatisation of SMRT came as a surprise and without any indication at the company’s recent annual general meeting.
The privatisation will succeed if the scheme receives 75 per cent shareholder approval at the meeting, not including Temasek’s shares. In contrast, a general offer will succeed only if Temasek manages to secure 90 per cent of the outstanding minority shareholder votes, a significantly higher threshold.
“Shareholders have also asked Sias if the price offered is fair. Temasek has announced a cash offer of S$1.68 per share. Sias will meet with SMRT directors and Temasek officials separately in due course to raise the aforesaid concerns of shareholders. Sias will also arrange a dialogue session with shareholders with the board and senior management of SMRT and its shareholders in due course on their concerns,” it added.
SMRT shareholders interested to attend the dialogue session should register their interest with Sias via email at admin [at] sias.org.sg, it said.
Last week, Temasek offered to take SMRT private to allow the public transport operator to focus on its primary role and free it from the costs and distractions linked to listing requirements. Belford Holdings — a wholly-owned subsidiary of Temasek — proposed to acquire the 46 per cent of SMRT not owned by Temasek at S$1.68 per share or a total of around S$1.18 billion for 702 million shares.
The offer values SMRT at about S$2.6 billion. The offer price represents a 10.8 per cent premium over the 12-month period volume weighted average price of S$1.516 per share before the last trading day before the announcement.
