Lian Beng’s Ong family, through OSC Capital, has made a cash offer of 62 cents to its shareholders. The offer will be unconditional in all respects. Following the completion of the offer, the company intends to delist from the SGX-ST.
OSC Capital, an investment holding company 51%-owned by Ong Pang Aik, Ong Lay Huan, Ong Lay Koon and Ong Lee Yap, made an offer to acquire all the shares that the Ong family does not already own in the company. The Ongs, including Ong Phang Hoo and Ong Phang Hui, are on the board of directors in OSC Capital.
As at April 11, Lian Beng has an issued and paid-up share capital of $83.67 million comprising 499.7 million shares, which excludes the 30.1 million treasury shares. As at the same date, the Ongs - Ong Pang Aik, Ong Lay Huan, Ong Lay Koon, Ong Lee Yap, Ong Sek Chong & sons and OSC Investments Capital have executed irrevocable undertakings in favour of the offeror. The Ongs’ stake totals some 347.6 million shares representing a 69.56% stake in Lian Beng.
The offer consideration represents a 15.7% premium over the volume-weighted average price (VWAP) for the shares traded in Lian Beng over the past one month.
However, the offer price is also significantly below Lian Beng's book value. As at Nov 30, Lian Beng’s net asset value per share improved to 153.83 Singapore cents, compared to 153.40 Singapore cents a year ago.
According to the filing by Lian Beng’s offeror, the trading volume of the company’s shares have remained “generally low” after its mandatory general offer (MGO) in 2021. The company’s average daily trading volume has been around 161,909 shares over the one-month period.
The offer also presents shareholders with a “clean cash exit opportunity” to realise their investment in the company’s shares.
“The offer consideration exceeds the highest closing price of the shares in the four-year period prior to and including the last trading day [being April 6]. It represents a premium ranging between approximately 8.8% and 79.7% over the closing prices of the shares during this period,” says Lian Beng’s offeror.
“The offeror is of the view that the company is unlikely to require access to Singapore equity capital markets to finance its operations in the foreseeable future as the company may tap on other funding sources such as bank borrowings. Accordingly, it is not necessary for the company to maintain its listing on the SGX-ST,” it adds.
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OSC Capital, in its filing, says it intends to make Lian Beng its wholly-owned subsidiary following the completion of the offer. It also intends to exercise its right of compulsory acquisition under Section 215(1) of the Companies Act and does not intend to support or take any step (including the placing out of shares by the offeror) for the public float to be restored and/or for any trading suspension of the shares by the SGX-ST to be lifted.
Shares in Lian Beng last closed at 57 cents on April 6.
