[SINGAPORE] Lyon Investments has raised the offer price for Sinarmas Land shares to S$0.375 a share from S$0.31 a share, in an announcement on Saturday (May 10).
The closing date has been extended to 5.30 pm on May 29.
The revised offer price represents an increase of 21 per cent or S$0.065 over the initial offer price, and is higher than the highest closing price of Sinarmas Land shares for more than six years.
The offeror, Lyon Investments, held about 70.3 per cent of the total number of issued shares in Sinarmas Land at the launch of the initial offer. As at May 9, the offeror received valid acceptances of about 23.9 per cent of the total shares. This brings Lyon Investments’ total number of shares to about 94.2 per cent.
The revised offer comes as the independent financial adviser (IFA) for the transaction, W Capital Markets, said that the offer was “not fair but reasonable”. Sinarmas Land’s share price closed above the initial offer price on every trading day since the offer was announced on Mar 27 – save for Apr 24, when it closed at S$0.31.
On May 5, the Securities Investors Association (Singapore), also known as Sias, criticised the offer as “exploitative”. It had concerns about the manner in which the company’s unlisted assets were valued.
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Carried at S$972.5 million on the balance sheet and revalued to S$1.2 billion, the assets were valued at S$757.9 million in the IFA’s sum-of-the-parts (SOTP) analysis. This represented a 37 per cent discount to the revalued net asset value of the assets, upon which the aforementioned “holding company discount” was then applied.
“In our judicial system, appeal mechanisms are a fundamental safeguard; yet, in the takeover process there appears to be no recourse for minority shareholders to challenge the IFA’s conclusions, no matter how debatable,” David Gerald, president of Sias, said, noting that the company’s unlisted assets had been “double-discounted”.
There were also concerns of the speed at which shareholders tendered their shares, with 22 per cent of valid acceptances received before the release of the IFA’s opinion or the board’s recommendation to accept the offer.
Sias then urged the offeror to revise its bid to more fairly reflect the company’s net asset value per share, which stood at S$0.851 as at end-2024.
The IFA hit back at the concerns raised by Sias and The Business Times columnist Ben Paul in his Mark to Market column, insisting that its valuations of Sinarmas Land’s assets are “appropriate” and “consistent with widely accepted industry practice”.
“We strongly disagree with Sias’ view that there is double discounting,” said Wayne Lee, chairman and chief executive officer of W Capital Markets, arguing that the holding company discount is conceptually distinct from the SOTP methodology.
Shares of Sinarmas Land closed unchanged at S$0.32 on May 9.
