Tat Hong boss, StanChart PE intend to take crane supplier private with S$0.50/share offer

TAT Hong Holdings' chief executive and Standard Chartered's private equity arm are launching a privatisation bid for the mainboard-listed crane supplier at S$0.50 per share.

The offer price is an 11.1 per cent premium over Tat Hong's closing price of S$0.45 on Thursday before the announcement was made.

Trading in the stock was halted on Friday morning before the market opened, and resumed at 11.30am with shares up by 8.89 per cent to S$0.49, on a volume of 3.78 million shares.

Compared with the stock's close of S$0.385 on Sept 20, 2017, the offer represents a 29.9 per cent premium.

That day is considered the last undisturbed trading session for the stock before Standard Charterd Private Equity (Singapore), or SCPE, announced in November 2017 that it intended to acquire Tat Hong shares.

The offering vehicle, THSC Investments, has secured undertakings from shareholders with 59.74 per cent of Tat Hong's shares.

The offer will turn unconditional only if THSC attains at least 90 per cent of Tat Hong, which would allow it to compulsorily acquire the remaining shares and privatise the company.

The offeror is also waiting for a number of pre-conditions to be met before launching a formal offer.

Those include obtaining approval from relevant authorities in Australia and China by July 11.

If the bid is successfully completed, the family of Tat Hong CEO Roland Ng will control about 68.8 per cent of the vehicle making the offer. SCPE will hold the remaining 31.2 per cent.

The pre-conditional offer announcement, released late on Thursday night, cited Tat Hong's low trading volume and the compliance cost of maintaining a listed status as reasons behind the offer.

The announcement said that THSC Investments Pte Ltd - which is jointly owned by SCPE and Mr Ng's TH60 Investments Pte Ltd - believes that privatising Tat Hong "will provide the offeror and the company with more flexibility to manage the business of the company, optimise the use of its management and resources and facilitate the implementation of any strategic alternatives and/or operational changes".

But it added that THSC Investments does not intend for now to make major changes to Tat Hong's business or its deployment of fixed assets, beyond the ordinary course of business.

Tat Hong confirmed in November 2017 that it had received a non-binding letter from the bank's private equity unit confirming its proposal to acquire shares of the firm at the same price of S$0.50 a share.

The company's disclosure came on the heels of a Bloomberg report that SCPE might have been looking to acquire a 29 per cent stake in Tat Hong.