Date: April 12, 2016
Mr JY Pillay
Chairman
Securities Industry Council
c/o The Secretary
Securities Industry Council
25th Storey, MAS Building
10 Shenton Way
Singapore 079117
Email: sic@mas.gov.sg
Dear Sir
TAKEOVER OFFER FOR OSIM
SIAS is very concerned that the announcement by Credit Suisse (“CS”) on behalf of Vision Three (the “Offeror”) on 5th April 2016 which was at variance with the series of share purchases made on the Offeror’s behalf on the same day might have resulted in the creation of a false market for OSIM’s shares on that day. The Offeror by announcing on 5th April 2016 that it had revised the final offer price to $1.39 cum dividend and $1.37 ex-dividend may have led to shareholders selling their shares at prices below $1.39 on 5th April 2016.
CS acquired 16,984,200 shares at prices ranging from $1.38 to $1.39 on 5 April – about 2.28% of OSIM’s total 741.594 million shares that had not been owned or controlled by the Offeror and its concert parties. The share purchases by the Offeror and/or CS on 5th April 2016 was a significant block that could tip the balance in favour of the Offeror’s plan to privatize the company.
The Offeror’s series of announcements on 8th April 2016 and on 9th April 2016 that the final offer price would now be revised to $1.41 cum dividend and $1.39 ex-dividend confused the market. Many investors in the market were puzzled with the convoluted contents of the announcements made on 8 and 9 April 2016. Notwithstanding the confusing announcements on 8 and 9 April 2016, the trading halt was lifted in the morning of 11th April 2016. Until the third announcement in the afternoon of 11th April 2016 while market was still trading, did it become clear that the Offeror and CS had purportedly made an error in the share purchases made on 5th April 2016 that necessitated a second upward revision in the final offer price on 8th April 2016 despite the earlier no increase statement made on 5th April 2016.
SIAS is concerned that shareholders who had sold their shares at prices below $1.39 on 5th April 2016 relying on the announcement on 5th April 2016 may have suffered losses. SIAS would like to appeal to the SIC (i) to investigate if a false market had been created for OSIM’s shares on 5th April 2016 resulting from the incongruent share purchases made by the Offeror and/or CS vis-a-vis the Offeror’s announcement on the same day, (ii) whether shareholders who had sold their shares at prices below $1.39 on 5th April 2016 relying on the announcement on 5th April 2016 may have suffered losses, and (iii) whether the shareholders who had suffered trading losses on 5th April 2016 should be properly compensated with reference to General Principle 3 of the Takeover Code that all shareholders must be treated equally?
Your faithfully
David Gerald
President & CEO
Securities Investors Association (Singapore)
