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IFA finds TEE CEO's privatisation bid fair and reasonable; vote to take place July 31
THE financial adviser to independent directors of TEE International have found a privatisation bid by chief executive Phua Chian Kin to be "fair and reasonable".
Provenance Capital further recommended that minority shareholders should choose to receive cash for their shares instead of equity in the newly privatised entity.
TEE International will conduct a scheme meeting on July 31 for shareholders to vote on the offer.
Mr Phua is offering, through private vehicle Oscar Investment, 21.5 Singapore cents or one new share in Oscar for every TEE share held. If the scheme is approved, shareholders who do not state their preference will receive cash.
The scheme needs approval from at least a majority in number of voting shareholders present and whose shares represent at least 75 per cent of voted shares.
Certain shareholders with a combined stake of 60.04 per cent, including Mr Phua, are considered to be in concert with the offeror and will not be allowed to vote.
Therefore, only shareholders holding the remaining 39.96 per cent will be allowed to vote. It also follows that the scheme requires approval from a majority in number of those shareholders whose combined stake is at least 29.97 per cent of TEE's issued share capital.
Independent shareholders with a combined 9.92 per cent stake have already given an undertaking to accept the offer and receive Oscar shares in return.
Provenance said that the offer was "fair and reasonable", citing the stock's historical performance and trading activity, the company's financials, a sum-of-the-parts valuation and the company's dividend track record, among other factors. Shareholders should therefore approve the bid.
"We would advise directors to recommend to minority shareholders who wish to accept the scheme offer, to accept only the cash consideration and not the offeror shares, unless such shareholders are prepared to bear the risk associated with an investment as a minority shareholder of an unlisted privately held company," the adviser said.