BOUSTEAD Singapore : F9D 0% proposed an unconditional cash exit offer for its real estate unit Boustead Projects : AVM 0% at S$1.18 per share. This is 23.6 per cent higher than Boustead Projects’ last-traded price of S$0.955 prior to its trading suspension.

It also represented a 24.2 per cent increase from the previous voluntary unconditional general offer of S$0.95 per share, which closed at 5.30 pm on Mar 27, 2023. 

The exit offer price is 20 times Boustead Projects’ consolidated earnings per share for its last financial year.

It is, however, still below Boustead Projects’ NAV (net asset value) per share of S$1.265 as at end-September 2022.

As in the previous offer, Ernst & Young Corporate Finance was appointed by Boustead Singapore as the independent financial adviser (IFA) for the exit offer. PrimePartners Corporate Finance remained Boustead Projects’ IFA.

Boustead Singapore’s original offer for Boustead Projects was launched in February this year at S$0.90 per share. This was later raised to a final offer price of S$0.95 apiece, which PrimePartners ruled as “not fair but reasonable” as the amount fell short of its estimated valuation range of between S$1.17 and S$1.38.

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In March, the Securities Investors Association Singapore advised Boustead Projects shareholders to reject the offer unless the offer price was raised to a “fair and reasonable” amount.

A Sep 26 directive issued by the Singapore Exchange Regulation also called for the exit offer to be made at a “fair and reasonable” price.

On Tuesday (Nov 14), Boustead Singapore said that its exit offer was made at the earliest practicable time after the expiry of its moratorium on Sep 27, 2023.

Boustead Singapore said that it could not make a better offer earlier because the Singapore Code on Take-overs and Mergers prohibits a new offer in the six months following the close of an offer.

The company also said it wanted both its own and Boustead Projects’ interim results and financial positions to be considered by both companies’ respective independent financial advisers.

Boustead Projects reported a 45 per cent increase in revenue for the six months to Sep 30, 2023, to S$170.2 million.

Profit fell 9 per cent to S$7 million, however, due to a share of loss of associates and joint ventures of S$6.2 million.

In the first half of 2022, Boustead Projects had booked a share of profit from associates and joint ventures.

This year’s losses were largely attributed to higher interest and operating expenses incurred for the opening of a mixed development at Bideford Road called Como Orchard, which the company said will “take time to reach a stabilised state”.

Boustead Singapore added that its independent directors “spent considerable time and effort during the moratorium period to weigh all possible delisting and privatisation options to achieve a positive outcome for all stakeholders”.

“They have a fiduciary duty to protect the interests of Boustead Singapore’s minority shareholders and had to ensure that any subsequent offer would be attractive to Boustead Projects’ public minority shareholders, and yet not be prejudicial to the interests of Boustead Singapore and its minority shareholders.”

Boustead Singapore will hold an extraordinary general meeting before the end of 2023 to seek approval from its independent minority shareholders in acquiring Boustead Projects shares belonging to Boustead Singapore’s chairman and group chief executive, Wong Fong Fui, and his children. 

Wong and his children – who collectively hold a 19.99 per cent stake as at the close of the previous offer – have abstained from decision-making on both the previous offer and Boustead Singapore’s current exit offer due to material conflicts of interest.

Shareholdings of Boustead Singapore in Boustead Projects stood at 75.5 per cent as at the close of the previous offer. The remaining 4.51 per cent equity in Boustead Projects was held by public shareholders who did not accept the previous offer.

As Boustead Projects did not meet the Singapore Exchange’s free float requirement of at least 10 per cent, the counter was suspended from trading effective 9 am on Mar 28, 2023.

Shares of Boustead Singapore ended 1.8 per cent or S$0.015 higher at S$0.85 on Tuesday, after news of its exit offer as well as the release of its H1 results.