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reporter2
31-12-12, 14:01
http://www.straitstimes.com/premium/money/story/no-plans-revise-sc-global-offer-price-ceo-20121231

No plans to revise SC Global offer price: CEO

Published on Dec 31, 2012

By Aaron Low


SC GLOBAL chief executive Simon Cheong will not raise his offer price in his bid to take the property developer private.

He said this in a statement released to the Singapore Exchange yesterday, quashing rumours that he was planning to revise his takeover bid after shares of the company shot up in recent weeks.

Mr Cheong, who is also chairman of the company, launched his privatisation bid on Dec 5 through his wholly owned investment holding company MYK Holdings.

At $1.80 a share, he is valuing the firm at $745 million.

But he is locked in a battle with another big shareholder of the company, Wheelock Properties, which believes his offer undervalues the company.

It said on Dec 13 that the stock's share price at the time represented "a discount of some 40 per cent to 50 per cent of RNAV (revalued net asset value)".

Wheelock bought 1,066,000 shares in SC Global at about $1.81 on Dec 13. The stock closed at $1.82 that day.

That sparked speculation that Mr Cheong would revise his offer up, which drove SC Global shares up to $1.90 as of last Friday.

But yesterday, he said he has no intention to revise his $1.80 a share offer.

This statement means he will not be allowed to "amend the terms of the offer, including the offer price, in any way".

Last week, PrimePartners, an independent financial adviser appointed by SC Global, recommended that shareholders accept Mr Cheong's offer, calling it "fair and reasonable".

It does not have an optimistic view of the current or future value of SC Global's portfolio.

It said the developer's revenue had declined almost 40 per cent year-on-year in the first nine months of this year, largely due to slower sales.

"The general consensus of market reports indicates that the high-end residential property market in Singapore is expected to remain cautious with sales remaining tepid and prices stagnating or declining in the foreseeable future," it said.

In a separate statement issued by SC Global yesterday, the company took issue with a report written by DMG analyst Goh Han Peng.

The report, published last Thursday, argued that Wheelock held the key to the privatisation exercise and that one solution was a merger between SC Global and Wheelock.

SC Global had pointed out that the writer was a shareholder of both SC Global and Wheelock just a day prior to the publication of the report.

"The board would like to state that there is currently no discussion with Wheelock Properties with respect to any merger and that the statements made in the article strictly represent the views of the writer and/or DMG but not that of the company," it said.

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reporter2
31-12-12, 14:08
http://www.businesstimes.com.sg/premium/top-stories/simon-cheong-180-share-final-offer-sc-global-20121231

Published December 31, 2012

Simon Cheong: $1.80 per share is final offer for SC Global

Developer says no merger talks with Wheelock

By kenneth lim


[SINGAPORE] Minority shareholders of SC Global Developments may have to temper their expectations for the New Year.

SC Global Developments chief executive Simon Cheong will not raise his $1.80 per share offer price to privatise the property developer. Mr Cheong said this in a filing with the Singapore Exchange yesterday.

The news will be a disappointing way for SC Global minority shareholders to end 2012, with SC Global stock last trading at $1.90 before the weekend.

Mr Cheong's "no-increase" statement will prohibit him from making further amendments to his offer, which lapses at the close of Jan 16.

In a separate statement yesterday, SC Global also refuted speculation that it may explore a merger with Wheelock Properties, a 16.1 per cent shareholder of SC Global.

"There is currently no discussion with Wheelock Properties with respect to any merger," SC Global stated.

Mr Cheong, who is making his offer through private investment vehicle MYK Holdings, currently has deemed control over 60.9 per cent of SC Global, including acceptances worth about a 0.1 per cent stake.

If Mr Cheong acquires a further 10.04 per cent stake, SC Global's public float will be less than the minimum 10 per cent threshold required by the exchange.

PrimePartners Corporate Finance, SC Global's independent financial adviser, recommended that shareholders accept Mr Cheong's offer in a Dec 26 report, finding the bid "fair and reasonable".

Mr Cheong first announced his intention to take his company private on Dec 5. The company's share price hovered at $1.80 for about a week after that, before picking up to as high as $2.08 on Dec 18 following Wheelock's disclosure that it was buying up shares on the open market at slightly above the offer price.

Wheelock's move spurred widespread guessing about the Hong Kong property company's intentions.

In a report, DMG & Partners analyst Goh Han Peng ventured that a merger would be complementary, combining SC Global's land bank with Wheelock's strong balance sheet. That report prompted SC Global's denial of merger talks yesterday.

One market watcher who is familiar with property developers said that the no-increase statement was not a surprise because Mr Cheong is coming from a position of strong leverage.

"He has looked at the options for minority shareholders and is saying 'I don't have to raise at all'," the market watcher said.

Minority shareholders who reject the offer face risks whether Mr Cheong succeeds or fails in privatising SC Global. Either they may be stuck with highly illiquid stock or the share price might drop, the market watcher added.

A counter offer is also unlikely because of Mr Cheong's existing majority stake.

Wheelock's next step is less certain. If the company does not accept Mr Cheong's offer, it could try to pick up more shares on the open market.

"They're probably looking for clout," the market watcher said.

kane
31-12-12, 15:01
if the market didn't share that same pessimistic outlook as PrimePartners has, they wouldn't already have valued it at 0.5x to 0.6x nav. unless primepartners think it will be so bad that they will drop to 0.2-0.3x nav. got so jia lat meh?

Ringo33
01-01-13, 07:54
the writer (DMG analyst Goh Han Peng) was a shareholder of both SC Global and Wheelock just a day prior to the publication of the report.

This is really dodgy on the analyst part.