Roxy-Pacific Holdings on Monday announced a takeover bid led by the Singapore-listed developer’s controlling family.
TKL & Family Pte Ltd, a holding company owned chiefly by Roxy-Pacific chairman and CEO Teo Hong Lim and his relatives, has made a pre-conditional voluntary general offer for all of Roxy-Pacific’s issued ordinary shares at a per-share price of S$0.485 in cash, the developer said in a release.
The offer values Roxy-Pacific’s 1.3 billion outstanding shares at roughly S$630.5 million ($466.3 million) and represents a 19.8 percent premium to the closing price of S$0.405 on 14 September, the last full trading day before the offer was announced. Shares were quoted at S$0.47, up 16 percent, in resumed trading Monday afternoon.
“The offer is an attractive opportunity for shareholders to exit their entire investment in cash with price certainty and without incurring brokerage costs,” Roxy-Pacific said.
Seeking COVID-Era Flexibility
TKL & Family has secured irrevocable undertakings for 76.44 percent of Roxy-Pacific’s shares, including from Kian Lam Investment, which holds 40.01 percent, and Sen Lee Development, which owns 11.22 percent, the companies said. Teo Hong Lim himself is the third-largest shareholder at 11.85 percent, and he holds the biggest stake in TKL & Family at 32.5 percent.
Roxy-Pacific noted that the COVID-19 pandemic continues to hinder the company’s hotel operations — which include the Grand Mercure Singapore Roxy and Noku-branded properties in Japan, Thailand and the Maldives — and that privatising the company will give TKL & Family more flexibility to manage the business and optimise the use of resources during the present time of economic uncertainty.
The construction of development projects continues to face prolonged challenges due to global supply chain disruption and a labour crunch, leading to rising costs and higher tender prices for new projects, Roxy-Pacific said.
The developer also cited the threat of delays in project completion and potential penalties from late delivery exacerbated by the increasing risk of default by construction contractors.
On the Upswing
Roxy-Pacific reported a first-half net profit of S$5.9 million, more than doubling from S$2.8 million a year earlier, as revenue climbed 20 percent to S$141.2 million.
In addition to its hospitality business, Roxy-Pacific has launched 54 small and medium-sized developments comprising more than 5,000 residential and commercial units in Singapore, Malaysia and Australia since 2004.
The company’s Australian holdings include a 40 percent interest in a commercial tower at 350 Queen Street in Melbourne acquired last year through a joint venture with Singapore-based TE Capital Partners, the investment arm of developer Tong Eng Group (controlled by the unrelated Teo family). The buyers picked up the 20-storey KTS House from Melbourne developer 3L Alliance for A$145 million ($101 million).
While there is no cross shareholding between the two companies, Roxy-Pacific and Tong Eng have jointly built and invested in several projects. In 2018, the partners bought the NSW Aboriginal Land Council’s building in the Sydney suburbs for A$40.8 million. In Singapore, they have co-developed two prime residential projects: the 85-unit Wilshire Residences and the 186-unit View at Kismis.