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Businessman makes conditional cash offer for Fabchem China

SINGAPOREAN businessman Henry Wee has launched a conditional cash offer for shares of explosives maker Fabchem China at S$0.158 apiece.

The offer was triggered after Mr Wee, who is also invested in Sim Leisure Group and Imperium Crown, acquired a 29.9 per cent stake in Fabchem China from DNX Australia on Friday for S$2.2 million or S$0.158 per share.

The S$0.158 per share offer represents a 6.76 per cent premium over the volume-weighted average price (VWAP) of Fabchem shares over the last 12 months. This is also the last traded price of Fabchem China on March 1 before trading was halted pending an announcement.

Mr Wee's wife, Tan Geok Bee, already controls 9.65 per cent of Fabchem through Fivestar Limited. So the acquisition raised the Wees' combined stake to 39.55 per cent, triggering a mandatory general offer.

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The offer is conditional upon the Wees having received, by the close of the offer, valid acceptances for them to control more than 50 per cent of Fabchem China.

Mr Wee's offer vehicle is Triple Vision, which was incorporated in Singapore last April as a management consultancy service company.

An offer document will be despatched within the next three weeks and the offer will remain open for acceptances for a period of at least 28 days from when the offer document goes out.

Once the offer closes, the offeror said it will conduct a comprehensive review of the operations, management and financial position of Fabchem, and evaluate various strategic options. Pending this review, the offeror intends for Fabchem to continue with its existing activities.

The second-largest shareholder in Fabchem is Fortsmith Investments, with a 32.35 per cent stake. Fortsmith is owned by Sun Bowen, an executive director of Fabchem since 2005 who is now its non-executive and non-independent director. Mr Sun is also executive chairman of Imperium Crown.

Mr Wee is Imperium Crown's largest shareholder with a 22.83 per cent stake. He also took a placement for a 2.2 per cent stake in Sim Leisure Group ahead of its listing in Singapore last month. 

In September last year, Sim Leisure signed a Memorandum of Understanding to build and operate a theme park on Imperium Crown's piece of land in Shandong Province's Wonder Stone Park. 

Trading in Fabchem shares will resume on Monday. Fabchem has been placed on the SGX watch-list since 2017, and has 36 months from June 5, 2017 to record a VWAP of at least S$0.20 and an average daily market cap of S$40 million or more over the last six months.

The offeror said: "Shareholders who are not prepared to bear the risks associated with the company being placed on the watch-list (which may subsequently result in a delisting) will benefit from the cash exit provided through the offer."