The minority shareholder group OCBCA final bid has reportedly been made to buy Great Eastern’s remaining shares. Channel News Asia.
OCBC, which has been Great Eastern’s largest shareholder for the past 20 years, recently was suggested Proposed acquisition of the remaining 11.56% stake in Great Eastern Holdings Limited for S$1.4 billion.
By June 13, OCBC had secured subscriptions for an additional 1.74 million shares, increasing its ownership to 89.01%.
According to a circular published after the market closed on Friday (June 14), Great Eastern’s independent directors have been advised to recommend to minority shareholders that they accept the S$1.4 billion takeover offer.
Independent financial adviser Ernst & Young described the proposal as “unfair but reasonable”.
EY noted that the offer price is below a valuation range of S$28.87 to S$36.19 per share and represents a 30 per cent discount to Great Eastern’s reported embedded value as at end-2023.
Despite these issues, EY considered the offer to be reasonable given the low trading volume of the shares, their historical price performance and the low likelihood of competing bids given that EY is a significant shareholder in OCBC.
EY also highlighted the risk of a trading halt if the number of shares offered falls below the 10% threshold set by the Singapore Exchange (SGX).
Meanwhile, OCBC reiterated that its takeover bid remains unchanged and that it will extend the deadline to July 12, 2024. The bank stressed that it has no plans to increase the offer price or further extend the deadline.
Great Eastern’s shares closed 0.27 per cent down at S$26.10 on Friday, valuing the company at about S$12.35 billion.
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