Date: June 21, 2024
To: Mr Andrew Lee, Chairman
and Members of the Board
Oversea-Chinese Banking Corporation Limited
as the offeror for Great Eastern Holdings Limited
Dear Chairman,
On 14 June 2024, OCBC maintained its offer price of S$25.60 per share for 54,732,310 shares, constituting an 11.56% stake in Great Eastern Holdings Limited (“GE”) that it does not already own. This decision was made despite the independent financial adviser (IFA)’s opinion that the offer of $25.60 per GE share was “not fair but reasonable”.
In response to OCBC’s final offer, SIAS has received numerous inquiries from GE shareholders seeking clarity and transparency from OCBC. These inquiries are crucial for them to make well-informed decisions regarding whether to accept OCBC’s offer of $25.60 per share for GE by 12 July 2024.
Questions to OCBC
- Can OCBC clarify whether its decision not to increase the offer price took into account the IFA’s opinion that the offer of $25.60 per share was “not fair but reasonable”?
- Considering that GE has significantly contributed to OCBC’s profits over the years, how does OCBC justify what is perceived as an “unfair” offer for the remaining 11.56% of GE shares? What are the key factors that led to the offer price of $25.60 per share, and how does it reflect the true value and potential of GE?
- For the benefit of OCBC shareholders, please share when OCBC launched this voluntary unconditional general offer, was there a clear strategy and/or the intention to make GE a wholly owned subsidiary? Can OCBC clarify its strategic goal and outline its plan to achieve this goal? How does a VGO deemed unfair by the IFA allow OCBC to achieve its goal?
- Has OCBC received feedback from its own shareholders regarding the potential reputation risks on this offer? How does OCBC intend to address these concerns?
- In the offer document, it states, “The Offeror intends to seek a delisting of GEH from the SGX-ST if the Free Float Requirement is not met. The Offeror does not intend to support any action or take any steps to maintain the listing status of GEH in the event the Free Float Requirement is not met and the trading of the Shares on the SGX-ST is suspended”. However, SGX Regco has also required that “Exit offers in conjunction with voluntary delistings must not only be reasonable, but also be fair”. With the intention of delisting GEH, why did the board, despite knowing these requirements, choose not to improve the offer and provide a fair and reasonable offer?
- If the trading is suspended due to the free float requirement not being met, will this issue become a permanent distraction to OCBC as management strives to execute the “One Group” strategy?
It is our sincere hope that the Board will respond adequately to the concerns of the minority shareholders of GE reflected in the above questions.
David Gerald
Founder, President and CEO
SIAS
Click here to see reply from OCBC
