Wheelock Properties snaps up stock in SC Global

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http://www.straitstimes.com/archive/...lobal-20121214

Wheelock Properties snaps up stock in SC Global

Published on Dec 14, 2012

By Jonathan Kwok


WHEELOCK Properties yesterday bought 1.07 million shares in SC Global Developments, in a snub of SC Global chairman and chief executive Simon Cheong's bid to privatise the company.

It bought the stock at about $1.81 each from the open market, it said last night.

Its entry price is above the $1.80 that Mr Cheong tabled last week for all the stock of SC Global that he does not already own. Wheelock now holds about 16.09 per cent of SC Global shares.

"In our assessment, the current share price represents a discount of some 40 per cent to 50 per cent of RNAV (revalued net asset value), and we would be unable to buy property assets directly at anything like these prices," said Wheelock senior executive director Tan Bee Kim in a statement.

The latest action by Wheelock is a clear indication that it does not accept Mr Cheong's offer price to take the property company private, setting up a battle royale for the company.

Mr Cheong has managed to increase his stake in SC Global, taking his total stakeholding to more than 60 per cent.

He needs to get his hands on approximately 11 per cent more of the company's shares to reach the 90 per cent threshold for the privatisation to go through.

The 90 per cent threshold is significant because, according to the Singapore Exchange's listing rules, the free float of a listed company's shares cannot fall below 10 per cent.

The 16 per cent stake held by Wheelock Properties and the 3 per cent stake held by SC Global executive director David Tsang also count towards the 90 per cent.

Free float shares exclude shares held by directors, the chief executive, substantial shareholders with more than a 5 per cent stake, controlling shareholders of the issuer or its subsidiaries.

Technically, Wheelock's latest action actually helps Mr Cheong's bid as its new shares will be counted towards the 90 per cent, said market watchers.

"But it is clearly signalling to the rest of the market that it thinks Mr Cheong's offer is too low," said a source.

Mr Cheong's bid to take SC Global private values the property developer at about $745 million.

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http://www.straitstimes.com/archive/...-plan-20121215

SC GLOBAL PRIVATISATION

Wheelock swoop hits tycoon's plan

Purchase of over 1m shares sends stock soaring above his buyout offer

Published on Dec 15, 2012

By Magdalen Ng


THE move by Wheelock Properties to buy more than one million SC Global shares on the open market on Thursday has hit plans by property tycoon Simon Cheong to privatise the firm.

The share swoop took Wheelock's holding to 16.09 per cent and sent SC Global stock soaring 15.5 cents, or 8.52 per cent, to $1.975 yesterday.

That is well above Mr Cheong's buyout offer of $1.80 per share.

Listing rules prevent Mr Cheong from buying shares on the open market above his offer price - so he either has to hold fire or raise that buyout offer.

Mr Cheong, chairman and chief executive of SC Global, launched a $745million cash offer for all the remaining ordinary shares of the luxury property developer last week.

He has since increased his stake to more than 60per cent.

About 22per cent of SC Global shares are still in the public float, but if this falls below 10per cent, the stock may be suspended under Singapore Exchange (SGX) rules.

By the same token, a firm cannot be delisted if the public float is above 10 per cent.

Wheelock's 16.09 per cent stake is not considered in the public float because the firm is deemed a substantial shareholder, as its holding exceeds 5 per cent.

Wheelock's share-buying seems to be indicating that the offer of $1.80 is too low.

In its announcement of its acquisition on Thursday, it noted that SC Global's share price "represents a discount of some 40 to 50 per cent of (SC Global's) revalued net asset value".

It also said: "We would be unable to buy property assets directly at anything like these prices."

An analyst who declined to be named told The Straits Times: "Wheelock probably recognises the value in SC Global's land bank.

"Wheelock has not been making many physical investments in recent years, so this stake in SCGlobal will give it exposure to Singapore's high-end residential market."

Technically, the more shares Wheelock buys on the open market, the fewer remain in the public float, which helps Mr Cheong's privatisation bid.

But if Wheelock's 16.09 per cent stake could be deemed as being part of the public float, then Mr Cheong's buyout could be stymied because a firm cannot be delisted if its public float is above 10 per cent.

Market watchers say the logical next step for Wheelock Properties may be to ask the SGX to consider its holding as part of the public float.

Rodyk & Davidson partner Ng Eng Leng noted that he has yet to hear of such a waiver being granted or even applied for.

But if Wheelock manages to achieve this, its 16.09 per cent stake will effectively prevent SCGlobal's delisting because the shares in the public float will always be more than 10 per cent.

The SGX was unable to reply by press time.

SC Global yesterday cautioned shareholders about the assessments and opinions about the buyout in the media.

"The board notes that many of (these) views are likely to be personal to the writer... and might not have taken into account the individual circumstances and needs of the readers," it said.

"Shareholders are advised to treat with caution any figures or other data provided by third parties who are not in possession of property specific details pertaining to... the company."

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