Property tycoon Simon Cheong is taking his flagship company SC Global Developments private and has made a cash offer of S$1.80 a share.
The offer price values the luxury property developer, SC Global, at approximately S$745 million.
It is also at a 49.4 percent premium to its last traded price of $1.205 on November 30.
Mr Cheong currently holds a 55.06 percent stake in SC Global and plans to de-list the company from the Singapore Exchange.
He is making the offer through his wholly-owned investment holding company, MYK Holdings Pte Ltd.
A company filing to the Singapore Exchange said Mr Cheong believes the offer represents an attractive opportunity for shareholders to exit and realise their investment for cash.
Among the reasons for taking the company private is the low trading liquidity of the shares.
SC Global’s trading liquidity has been thin with an average daily trading volume of about 243,282 shares or 0.06 percent of the issued share capital over the last 12 months.
The company said such low liquidity limits the usefulness of a public listing.
It adds that the privatisation will also allow management to have greater flexibility to manage and plan its residential property development business.
This because the company will not need to report its performance on a quarterly basis and will be dispensed from listing-related expenses.
Market watchers said the move may be linked to the weaker performance in the luxury property segment.
SC Global has also reportedly seen rising inventory levels in unsold units at its key development The Marq on Paterson Hill.
A unit at the development was sold in August for S$19 million, or S$6,394 psf.
Analysts have also said that SC Global shares are looking cheap considering the value of its unsold inventory of luxury properties.
This means its current market capitalisation of just S$508 million is less than the estimated profits it would rake in from the sale of its unsold units at The Marq.
DBS Bank has been appointed as financial adviser to the offeror.
Source : Channel NewsAsia – 5 Dec 2012