http://www.businesstimes.com.sg/prem...an-16-20121220
Published December 20, 2012
Simon Cheong's offer closes on Jan 16
Bid at $1.80 a share comes amid market expectations of a higher offer
By Mindy Tan
SC Global Developments chairman and chief executive Simon Cheong's unconditional offer to take the company private at $1.80 a share will be open for acceptance until Jan 16, even as the market expects a higher bid to be tabled for the property firm.
The stock of SC Global closed 1.5 cents, or 0.76 per cent, lower at $1.965 yesterday.
The counter's price had shot up to a high of $2.05 on Dec 17, after Wheelock Properties raised its stake in the company through the purchase of 1.067 million shares at $1.81 apiece.
In its offer document, MYK Holdings - Mr Cheong's investment holdings company - did not allude to the key reason market watchers posit Mr Cheong is taking the company private.
Market watchers suggest that if Mr Cheong is successful in his bid to take SC Global private, and ensures that the company is fully owned by Singapore citizens, the luxury developer could potentially escape forking out up to $72 million in penalties for its remaining unsold units.
This figure could balloon to a worst-case extension charge of more than $200 million over the next three years if there are no additional sales from its projects The Marq on Paterson Hill, Hilltops and Martin No 38, according to analyst calculations.
MYK said it is seeking to delist the company given the low trading liquidity of the shares, and the fact that the company has not accessed the capital markets for funds for at least the past six years.
In addition, taking the company private will allow management to have greater flexibility in managing and planning its residential property development business, even as the company dispenses with listing-related expenses and channels its resources to its business operations.
Mr Cheong's total control in SC Global stands at over 60 per cent. Including the stakes held by Wheelock and executive director David Tsang, Mr Cheong needs approximately 11 per cent more of the company's shares to reach the 90 per cent threshold before he can delist the company.