Mainland investor Gordon Tang is set to privatise Singapore-listed property firm SingHaiyi Group following a successful takeover bid by a private holding firm controlled by the mysterious property investor.
SingHaiyi told the Singapore bourse late Thursday that Haiyi Treasure, a private holding company controlled by Tang and his wife Celine Tang, has secured valid acceptances from investors controlling 95.8 percent of its listed stock for its offer to acquire the shares at S$0.117 each, with a compulsory takeover of the remaining shares now set to proceed.
The deal values the soon-to-be delisted company chaired by Neil Bush — a younger brother of former president George W Bush — at S$492.8 million ($361 million). The offer price represents a 19.4 percent premium over the 12 month volume weighted average price for the stock at the time the voluntary conditional cash offer was launched last month.
The acceptance of the buyout offer paves the way for Gordon Tang to privatise a developer which has played a key role in more than $900 million in project acquisitions over the past year, including the $474 million buyout of the Peace Mansion apartments and the connected Peace Centre commercial complex in District 9 earlier this month and the $207 million acquisition of the Maxwell House project near Tanjong Pagar in May.
Passion for Privacy
The owners believe privatising the company will provide greater flexibility in managing the business and its resources, adding that the buyout offer will help their public investors to exit “at a premium” without additional transaction costs. By Friday SingHaiyi’s stock price reflected that offer price, closing the day at S$0.117 per share.
SingHaiyi said the Tangs and their concerted parties currently own, control or have the permission to acquire 95.81 percent of the company’s total shares, including valid acceptances, with the investing public given until 10 January to accept the offer price before Haiyi Treasure exercises its right for compulsory acquisition and trading of the shares is suspended.
The buyout was first offered on 9 November, the same day SingHaiyi announced that its attributable earnings for half-year ending September reached S$12.5 million to reverse the S$4.6 million loss it booked in the same period last year.
UOB acted as the sole advisor for Haiyi Treasure in the deal.
The developer, which manages a portfolio of residential and commercial assets including the twin 10-storey office towers at 9 Penang Road, is controlled by the Tangs, with Neil Bush maintaining a 5.22 percent stake and acting as a non-executive non-independent director, according to the company’s 2020 annual report.
The buyout documents did not make clear if Bush was among the Tangs’ concerted parties or would be continuing as chairman of the privatised entity.
The Tangs incorporated Haiyi Treasure in September, with Gordon Tang, a native of Shantou in China’s Guangdong province holding a 70 percent stake while his wife owns the remaining 30 percent.
Despite owning significant stakes in Suntec REIT, developer OKH Global and OUE Hospitality REIT, the source of Gordon Tang’s wealth has never been published, with the tycoon having once described himself as having been a professional windsurfer in China during the 1980s. Last year Forbes estimated Tang’s wealth at $940 million.
Expanding Singapore Empire
As they expand their real estate holdings in the Lion City, the Tangs have used SingHaiyi along with other companies they control, including real estate development and investment firm Ultra Infinity and Singapore-listed builder CEL Development, to buy up a range of assets in with the purchase of the Peace Mansion and Peace Centre complex standing out as the largest this year.
In May, SingHaiyi Investments Pte Ltd, a private company believed to be controlled by the Tangs and SGX-listed construction firm Chip Eng Seng, which has Gordon Tang as its largest investor at 35.4 percent, linked up with Hong Kong-listed Chuan Holdings to buy out the owners of the Maxwell House commercial complex, with a goal of creating a new mixed-use project.
In June, SingHaiyi Group agreed to pay ARA Asset Management-managed Suntec REIT $220.2 million for the 30 percent stake in the 9 Penang Road office complex which SingHaiyi did not already own. Gordon Tang is the largest shareholder in Suntec REIT with a 9 percent stake while his father, Tang Jialin, maintains a 6 percent interest.
The company also has three properties and real estate investments in the United States, on top of its 1.63 percent stake in Australian fund manager Cromwell Property Group and the 25 percent interest it holds in ARA Asset Management’s ARA Harmony Fund III, a private vehicle which invests in Malaysia shopping malls.
The Tangs’ move to privatise SingHaiyi follows a string of similar efforts by other Singapore companies this year, including Roxy-Pacific Holdings, which on Friday announced that it had appointed OCBC as an independent financial advisor for a S$630.5 million buyout first proposed in September.
In March, property giant CapitaLand announced a restructuring plan that privatised its development operations under CapitaLand Development, while its investment management arm, named CapitaLand Investment, was eventually launched on the mainboard in September.
Still ongoing is a buyout battle for the property holdings of Singapore Press Holdings, with Temasek Holdings-backed Cuscaden Peak appearing ready to edge out Keppel Corporation with a $3.9 billion bid for the publisher’s portfolio of properties and its interest in SGX-listed SPH REIT.