AEM to vote against dividend resolutions at CEI's AGM on April 19

AEM Singapore, which has made an offer for all the shares of CEI it does not already own, will vote against the payment of dividends at CEI's annual general meeting (AGM) on April 19.

As AEM already has control of 81.7 per cent of CEI, this means the proposed payments of a third and final dividend of 0.4 Singapore cents per share and a special dividend of 2.6 cents per share will not take place.

In a statement, AEM said it believes it would be in the best interest of CEI that the cash be retained to fund expansion and optimise operational needs.

Shareholders who have tendered or will tender their shares in acceptance of the offer will not be affected, as the relevant settlement dates fall before the May 7 record date for the dividends.

If acceptances for AEM's offer cross the 90 per cent threshold, and AEM is able to exercise its right to compulsorily acquire the remaining shares of CEI, then CEI shareholders who do not accept the offer will still be entitled to an offer price of S$1.15 per share.

AEM explained this would not have been the case if AEM had voted in favour of the dividend payouts. If the dividends were to be paid, then AEM would adjust its consideration for the remaining offer shares to S$1.12.

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AEM's S$99.7 million buy-out offer for CEI, a contract manufacturer, will close on April 26, 5.30pm.

The bid was declared unconditional on March 19.

CEI shareholders can choose to receive their consideration in cash or a combination of cash and shares of AEM Holdings, a locally listed manufacturer of semiconductor test equipment and the parent company of AEM Singapore.

Those who accept the offer without stating their preference will be deemed to have opted to receive cash.

The S$1.15 offer price marks a premium of 26.1 per cent to the volume-weighted average price of CEI shares in the 12 months to Jan 8, the last trading day before the pre-conditional offer was made.

Shares of mainboard-listed AEM Holdings closed 0.24 per cent or S$0.01 lower at S$4.18 on Monday. Meanwhile, CEI shares closed 0.83 per cent or S$0.01 higher/lower at S$1.21.