SIC: Hyflux's Lum must make offer for HyfluxShop following dividend in specie

HYFLUX controlling shareholder Olivia Lum must make a general offer for the water treatment company's consumer business after the completion of a dividend in specie distribution, according to the Securities Industry Council (SIC).(See clarification note)

Ms Lum, who is chief executive and chairman of Hyflux, will offer 17.83 Singapore cents per HyfluxShop share, matching a partial offer she had made as part of the in specie distribution and the distribution valuation of the HyfluxShop shares.

Hyflux is planning to distribute 70 per cent of the shares in HyfluxShop Holdings to Hyflux's existing shareholders on the basis of one HyfluxShop share for every 10 Hyflux shares held, for free. Hyflux, which is undertaking the distribution as part of plans to list HyfluxShop, will retain the remaining 30 per cent stake in HyfluxShop.

Ms Lum had offered to buy any unlisted HyfluxShop shares from Hyflux shareholders at 17.83 Singapore cents per HyfluxShop share, provided her direct shareholding in HyfluxShop does not exceed 29.99 per cent.

Hyflux and Ms Lum, who holds a 34.05 per cent stake in Hyflux, will together hold about 53.8 per cent of HyfluxShop shares after the distribution. That will oblige Ms Lum to make a general offer for HyfluxShop shares she does not already hold under Singapore's takeover code, although the SIC, which oversees takeovers in Singapore, can grant a waiver.

But SIC gave a verbal ruling on Jan 31 that Ms Lum will be obliged to make an offer for HyfluxShop if the distribution goes through. As a result, Ms Lum is now prepared to make a general offer for HyfluxShop after the distribution, and her offer to purchase HyfluxShop shares will not be capped once her general offer is launched.

Hyflux shareholders approved the distribution at the extraordinary general meeting held on Thursday afternoon.