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Thread: Wheelock accepts Simon Cheong's offer

  1. #1
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    Default Wheelock accepts Simon Cheong's offer

    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.

  2. #2
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    Default SC Global goes private

    http://www.straitstimes.com/premium/...ivate-20130117

    SC Global goes private

    CEO Simon Cheong succeeds in securing enough shares to get firm delisted, as investors cash out after property cooling measures

    Published on Jan 17, 2013

    By Melissa Tan


    UPMARKET property developer SC Global is headed for delisting as chief executive Simon Cheong has succeeded in his bid to take the firm private.

    Mr Cheong yesterday managed to acquire enough shares of the firm to bring its free float to below 10 per cent.

    This is the level at which Singapore Exchange (SGX) rules deem the firm should be taken private.

    Even Wheelock Properties, a big shareholder that has been against Mr Cheong's bid, decided to sell its 17.93 per cent stake to him yesterday.

    Wheelock had said last month that it believed Mr Cheong's offer of $1.80 per share undervalued SC Global.

    It could not be reached for comment yesterday.

    Mr Cheong, who is also SC Global's chairman, now holds 90.36 per cent of the firm.

    This is after he bought 1.5 million shares on the open market and received acceptances from shareholders holding 80.8 million shares altogether yesterday, including Wheelock's stake.

    Mr Cheong launched his privatisation bid last month, offering $1.80 a share, which valued the firm at $745 million.

    SC Global shares closed at $1.80 yesterday, unchanged from Tuesday.

    The deadline for shareholders to accept Mr Cheong's offer was set at yesterday, but he has extended it to Jan 30, the firm noted in an SGX filing yesterday.

    The tough property market cooling measures announced last Friday inadvertently lent a hand to Mr Cheong's cause.

    Most property stocks fell after the measures were announced and it seems many SC Global investors decided to cash out.

    This helped Mr Cheong accumulate more shares, bringing him closer to the key 90 per cent level.

    On Tuesday, Mr Cheong snapped up 63,000 shares on the open market at $1.80 apiece through his wholly owned investment holding company MYK Holdings, according to an SGX filing.

    He also secured nearly 10.2 million additional shares on Tuesday through acceptances in connection with his voluntary unconditional cash offer.

    The amount of SC Global shares now in free float is 9.64 per cent.

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

    When Mr Cheong launched his privatisation bid on Dec 5, he said that a delisting would allow SC Global greater flexibility to manage its business while relieving it of public listing costs and requirements, including quarterly reporting.

    Shareholders who do not accept Mr Cheong's offer by the Jan 30 deadline will have to wait for the compulsory acquisition to be made, which could happen more than a month after the deadline.

    PrimePartners Corporate Finance, the independent financial advisers appointed by SC Global, recommended on Dec 26 that shareholders accept Mr Cheong's buyout offer.

    PrimePartners noted that after SC Global had released its third-quarter results in November, two analysts had given the stock an average target price of $1.14. Mr Cheong's offer of $1.80 represented a premium of about 57.9 per cent to this.

    PrimePartners added that SC Global shares had not traded at or above $1.80 since Dec 1, 2010, until Mr Cheong made his offer.

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  3. #3
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    Actually no need to worry about the exemption - the government almost always allow extension with no extra costs. The rule about having to sell everything in 2 years after TOP has no bite. Look at SC Global - so many unsold units and still hoarding on to the units and probably will end up renting them out because no one is buying at the price point.

    "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."

  4. #4
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    Default

    Do developers pay stamp duty when they decide to rent out an unsold unit?

  5. #5
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    Simon has to thank the CM7 for freaking out the partner!

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