http://www.businesstimes.com.sg/prem...offer-20130117
Published January 17, 2013
Wheelock accepts Simon Cheong's offer
Surprise move means SC Global chairman can take developer private
By Mindy Tan
SC GLOBAL Developments' chairman and chief executive Simon Cheong has succeeded in his bid to take the luxury developer private, thanks to a surprise move by Wheelock Properties to sell its entire 17.9 per cent stake to him.
Wheelock said in a statement issued yesterday that it was disposing of its stake "in light of recent market developments and new investment opportunities" and that it "will in due course reinvest the proceeds in alternative projects".
It added that it was awarded a large residential site in Ang Mo Kio Avenue 2 for $550 million last week and "would be focusing its attention to make it one of the most distinctive homes in the Ang Mo Kio area".
For Mr Cheong, yesterday's acceptances of his offer, which totalled 80.8 million shares (including Wheelock's stake), together with market purchases of about 1.5 million shares, took his stake in SC Global to 90.36 per cent.
Under the Takeover Code, Mr Cheong will be able to compulsorily acquire the remaining shares he does not already own.
The public float outstanding is 9.64 per cent, below the 10 per cent threshold to maintain a listing.
With Wheelock no longer a shareholder, it now means that SC Global could potentially avoid forking out up to $72 million in penalties for its remaining unsold units.
This is because under rules passed in 2011, developers with foreign shareholders must sell all the units in a project within two years after the project receives its Temporary Occupation Permit (TOP). Wheelock has a Hong Kong parent company.
SC Global said last week that it had to pay $5.5 million for a six-month extension on the stipulated period for selling The Marq on Paterson Hill.
Exemption for the extension charges is subject to government approval.
Separately, Mr Cheong's cash offer has been extended by a further 14 days to Jan 30.
Shareholders who do not accept the offer within this period can wait for the court-sanctioned compulsory acquisition process, which will normally take another one-and-a-half months to complete.
Wheelock had earlier raised its stake in SC Global through purchases, saying that "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)".
In a late announcement yesterday, Wheelock said that "the aggregate consideration payable by the offeror . . . is $133,516,364.40 in cash". It also said that "the book value of the disposal shares was $40,967,000" and "the excess of proceeds over the book value of the disposal shares is $92,549,000".
Mr Cheong launched his voluntary unconditional cash offer for SC Global's shares on Dec 5 at $1.80 a share, stating that an unlisted company would have more flexibility if it did not have to report results on a quarterly basis. Noting the low trading liquidity of the shares, he added that SC Global had not tapped capital markets in at least six years.
SC Global's shares ended trading unchanged yesterday at $1.80.