Great Eastern has announced its proposal to delist from the Singapore Exchange, following an acquisition offer from its majority shareholder, Oversea-Chinese Banking Corporation (OCBC), amounting to S$900 million (approximately US$700 million). The move was disclosed in a joint statement and official filings on Friday, 6 June.
OCBC, Singapore’s second-largest lender, is seeking to acquire the remaining 6.28 per cent stake in Great Eastern that it does not already own. The offer, priced at S$30.15 per share, represents a 17.8 per cent premium over a previous offer made in May 2024 at S$25.60 per share. At this revised price, Great Eastern is valued at S$14.27 billion.
Trading in Great Eastern shares has been suspended since 15 July 2024 after the company’s public float fell below 10 per cent, triggered by OCBC’s earlier acquisition of an 11.56 per cent stake. As of this latest development, OCBC holds a 93.72 per cent interest in the insurer. However, this still falls short of the ownership threshold required to initiate a compulsory acquisition or effect a delisting without minority shareholder approval.
According to the joint statement, EY, acting as the independent financial adviser, has assessed the latest offer to be both fair and reasonable. OCBC has stated that it does not intend to revise the terms of the offer. This marks OCBC’s fourth attempt to fully acquire Great Eastern, with previous bids dating back to 2004.
Great Eastern’s proposed delisting is subject to at least 75 per cent approval from minority shareholders. OCBC will abstain from voting on the proposal. In the event that the delisting does not proceed, the company intends to seek shareholder approval for an alternative solution to restore its public float. This would involve a one-for-one bonus issue of new shares, comprising both listed shares with voting rights and non-listed shares without voting rights.
Should the bonus issue proceed, OCBC plans to receive the non-voting shares. This would result in a reduction of its shareholding in Great Eastern to 88.19 per cent, thereby facilitating the restoration of public float and a resumption of trading activity.
Two entities controlled by Lee Thor Seng and his sons, members of the OCBC founding family, collectively hold nearly 2 per cent of Great Eastern, making them the second-largest shareholders. Other shareholders include Wong Hong Sun and Wong Hong Yen, who together own about 1 per cent, and Palliser Capital, which holds a 0.27 per cent stake and has criticised the offer as unfavourable to shareholders.
The Securities Investors Association (Singapore), or SIAS, acknowledged that the revised offer price represents a material increase from the earlier bid. David Gerald, SIAS founder, president and CEO, noted that the final decision now lies with shareholders. However, he expressed disappointment that those who had accepted the initial offer of S$25.60 would not receive any further compensation, having lost the opportunity to realise full value for their holdings.
Mr Gerald also highlighted the uncertainty faced by shareholders during the prolonged trading suspension, which has severely restricted their ability to make investment decisions or exit their positions. He urged regulatory bodies to refine existing rules to offer stronger protections for investors in similar scenarios.
SIAS is preparing to engage with both Great Eastern and its shareholders to clarify the implications of the proposed resolutions. The organisation has encouraged investors to evaluate the offer based on their individual circumstances and investment goals, noting that the measures put forward aim to bring the insurer back into compliance with Singapore Exchange listing requirements.
-Reuters
