Mainland billionaire couple Celine and Gordon Tang are moving to further consolidate control over their Singapore property empire by taking developer Chip Eng Seng private in an all-cash buyout offer that values the company at S$565 million ($411 million).
The Tangs, through their investment firm Tang Dynasty Treasure, have together made an offer to acquire all remaining shares they do not already own in the Singapore-listed builder and developer in a deal valuing the company at around S$565 million ($411 million), according to an announcement on the local bourse late Thursday.
The mainland couple, whose background before becoming prominent investors in Singapore has never been publicly documented, are offering S$0.72 in cash for each outstanding share in the more than 60-year-old company in a deal that they say aims to “strengthen competitiveness and optimise resources”.
Chip Eng Seng’s delisting would be the second privatisation effected by the Tangs in the past year after the property power couple took full control of local builder SingHaiyi Group in January through a S$493 million buyout deal.
Market Challenges Highlighted
The buyout offer, which was voluntary when first announced late Thursday, became mandatory under SGX rules early Friday, after the Tangs purchased an additional 6.3 million shares in the company.
The offer represents a 28 percent premium to Chip Eng Seng’s average stock price of S$0.56 over the six months ending 24 November, and a 37 percent markup when compared to its 12-month average share price of S$0.53.
The Tangs, whose buyout offer was issued by their financial advisor United Overseas Bank, pointed to the gloomy investment climate in deciding to privatise Chip Eng Seng — a local firm that started as a subcontractor in the 1960s and has since grown to be a regional developer with commercial, hospitality and residential assets across its home country, Australia and New Zealand.
“On the back of the macro headwinds, the offeror believes that this offer will provide the offeror with greater control to manage the overall business, optimise and streamline the resources to improve operational efficiency and effectiveness,” the disclosure read.
The Tangs described a “challenging environment” in Singapore driven by rising interest rates, skyrocketing inflation and the ongoing impact of the COVID pandemic, as well as persistent geopolitical tensions in pushing for the buyout.
Bringing the Team Together
Apart from their corporate buyout efforts, the Tangs have been making a splash elsewhere in Singapore’s property market through acquisitions such as their purchase of a stake in the S$1.7 billion redevelopment project at 8 Shenton Way in April, joining local developer Perennial Holdings, mainland tech giant Alibaba and others in building the next tallest building in the Lion City, with Chip Eng Seng playing a leading role in that investment.
The listed developer has also teamed up with other elements of the Tangs’ corporate universe, including SingHaiyi on a range of other major projects in Singapore during recent months.
In July, the company’s CEL Development subsidiary, together with SingHaiyi and Haiyi Holdings, teamed up with local developers KSH Holdings and Ho Lee Group to buy the Park View Mansions complex in Jurong East via an en bloc sale worth S$260 million. The group plans to develop a 440-unit residential complex on the site.
In December 2021, Chip Eng Seng, SingHaiyi and Haiyi Group joined together to purchase the Peace Mansion mixed-use project in District 9 for S$650 million, with plans to convert that ageing complex into a combined commercial and residential development.
In the middle of last year, SingHaiyi and Chip Eng Seng, alongside Hong Kong affiliate Chuan Holdings, won the Maxwell House site in Singapore’s Tanjong Pagar area for S$276.8 million, with the JV planning to build a 13-storey commercial development.
Public investors seemed unfazed by the takeover bid, based on Chip Eng Seng’s stock price.
Following the announcement on Thursday evening, shares of Chip Eng Seng dipped by less than a percentage point to S$0.715 apiece at the start of the trading day on Friday, and recovered back to the same level of S$0.72 each at the end of the trading session.
Should the Chip Eng Seng privatisation effort prevail, the Tangs will continue to have substantial holdings in at least three SGX-listed property entities: OKH Global, OUE Commercial REIT and Suntec REIT.
Celine Tang has been OKH Global’s executive chairman and chief executive since August 2016, with the couple jointly owning a 44.3 percent interest in the developer through Haiyi Holdings, as of mid-September. That ownership stake has stayed constant since they first invested in OKH six years ago.
As of March 2022, Gordon Tang has an 8.3 percent stake in OUE C-REIT while Celine Tang holds a 6.48 percent share.
Gordon and Celine Tang, along with their immediate family members, also own more than 2.8 million units of ESR-managed Suntec REIT, or nearly 28 percent of the SGX-listed trust’s equity.
In the only published account where Gordon Tang has commented on his experience in China prior to arriving in Singapore, he referred to a career as a professional windsurfer.
In addition to his business interests, Tang is currently first vice president of the National Olympic Committee of Cambodia and president of the Cambodian Sailing Federation, as well as a leading supporter of mixed martial arts in the region, according to published accounts.