Investors grab Wheelock Properties after offer to take it private
Investors made a dash for Wheelock Properties (Singapore) yesterday after its Hong Kong-listed parent offered to take the mainboard-listed property developer private.
Shares jumped at the opening bell after a trading halt was lifted and soon breached the $2.10 offer price.
It closed at $2.18, up 44 cents or 25.3 per cent, a sign that investors expect the buyout bid to go up. About 26.3 million shares changed hands, compared with an average daily turnover of 740,000 over the past year.
The $2.10 offer marks a premium of 20.7 per cent over the counter's close at $1.74 last Friday.
The voluntary offer by Wheelock and Company - which owns 76.21 per cent of the company - is unconditional, it said yesterday.
A deadline for acceptances has not been announced, but DBS, Wheelock's financial adviser for the buyout, said that the earliest expected closing date will be Sept 7.
The offer price values the company at $2.51 billion, with a back-of-the-envelope sum showing Wheelock and Company would fork out $597.7 million for the shares it does not already own.
Wheelock and Company said delisting Wheelock Properties would mean more flexibility to manage the business and allow it to optimise its resources. It also lets investors cash out amid low trading liquidity.
OCBC Investment Research analyst Deborah Ong was not surprised by the offer, especially after the sector slump on recent cooling measures. She said: "We believe the offer price of $2.10 came in at the low end, and it is 10.3 per cent below our fair value of $2.34."
Mr Royston Foo, who covers property for Smartkarma, said the offer price fell below his fair value estimation of $2.66.
He also said the fragmented minority share ownership could hinder Wheelock and Company from reaching the 90 per cent threshold for compulsory acquisition. - THE STRAITS TIMES
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