SGX-listed Boustead Singapore has received acceptances from shareholders representing more than 90 percent of the issued shares in Boustead Projects, setting the stage for the investment firm to delist the property and construction division and take it private.
Valid acceptances of Boustead Singapore’s revised offer of S$0.95 per share amounted to 90.69 percent of the total number of shares, Boustead Projects said Monday in a filing with the Singapore Exchange.
The offer, which was raised in late February from the initial proposal of S$0.90 a share made earlier that month, values Boustead Projects at S$297.6 million ($222.2 million). Boustead Singapore has said the privatisation would help it focus on rebuilding its engineering and construction business, as well as reduce reporting and compliance obligations related to the unit being a listed company.
The buyout is the latest in a series of take-private moves by controlling shareholders in Singapore-listed property firms in recent weeks, following a deal to buy up the shares in Chip Eng Seng that passed the minimum acceptance level one month ago and a similar milestone for James Koh’s Global Dragon this week.
Board Members Say Yes
With the fraction of Boustead Projects shares held by the public poised to slip below 10 percent, the stock exchange is authorised to suspend trading in the shares because of the loss of free float. The company said Monday that Boustead Singapore, controlled by chairman and CEO Wong Fong Fui, plans to privatise the unit and “has no intention to undertake or support any action” to lift a trading suspension.
Those accepting Boustead Singapore’s offer included Boustead Projects chairman Tam Chee Chong and board member Yong Kwet Yew. According to exchange filings, Tam sold 50,000 shares at the S$0.95 price last Friday, then Yong unloaded the same amount on Monday.
The offer remains open to acceptances until 5.30pm on 27 March, after which time there will be no extension of the closing date, Boustead Singapore said in its offer document. Boustead Projects shares were trading at the offer price of S$0.95 on Tuesday afternoon.
Boustead Singapore first proposed to take the unit private at S$0.90 in cash with a goal of delisting the subsidiary in order to focus on streamlining its operations, especially its pandemic-hit engineering and construction business.
The original deal was deemed unattractive by some observers, with analyst Khang Chuen Ong of CGS-CIMB Securities noting that the S$0.90 price represented a 50 percent discount to his target revalued net asset value of S$1.79 per share. The Securities Investors Association Singapore judged the discount to asset value “simply too large to ignore” and sent a letter to the firm urging a sweetened offer. A week later the offer price was bumped up to S$0.95.
Boustead Projects’ announcement came one day after Koh and his concert parties revealed that they had secured acceptances from holders of 95.5 percent of the shares in Global Dragon, enabling the Fragrance Group boss and his JK Global Wealth vehicle to proceed with a privatisation of the SGX-listed developer.
Tang Dynasty, an investment firm controlled by SingHaiYi owners Gordon and Celine Tang, gained 90 percent control over developer Chip Eng Seng on 16 February, after taking SingHaiYi itself private in a deal clinched in December 2021.
Founded in 1996, Boustead Projects had five wholly owned properties worth S$110 million across Singapore, China and Vietnam as of last September, in addition to stakes in five joint venture projects valued at S$516 million.
Its Boustead Industrial Fund, sponsored with Metro Holdings and backed by an unnamed institutional investor believed to be the Abu Dhabi Investment Corporation, is set to have S$749 million in total assets under management across 16 properties in Singapore should it follow through on a S$98.8 million deal to purchase the J’Forte Building announced in late January.
While the sponsors have not revealed the identity of the institutional backer for the fund, Boustead Projects in 2017 had set up a joint venture with ADIC through a fund managed by UBS Asset Management.
Last June, Boustead Projects led a consortium in acquiring an 18-storey commercial tower at 28 and 30 Bideford Road near Singapore’s Orchard Road for S$515 million. The property added to a real estate portfolio that already features ALICE@Mediapolis smart business park in One North and GSK Asia House in nearby Rochester Park.
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