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Challenger's voluntary delisting blocked by 11.36% vote; exit offer to lapse

THE voluntary delisting of consumer electronics retailer, Challenger Technologies, failed to go through on Thursday, as some 11.36 per cent of shareholders voted against the resolution.

This is the second lapsed privatisation deal this week, after the buyout offer for mainboard-listed Indofood Agri Resources fell through on Wednesday due to insufficient acceptances.

At Challenger's extraordinary general meeting (EGM) on Thursday, minority shareholders, led by James Hay, director at Pangolin Investment Management, continued to bemoan the too-low offer price at the question-and-answer session before putting the resolution to the vote.

With the delisting now rejected by shareholders, the exit offer will lapse, and the offeror and its concert parties will not be able to make another offer for the shares for 12 months from the date the exit offer lapses.

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Speaking to media after the meeting, Mr Hay said he was "delighted" with the outcome, both for Pangolin and individual retail shareholders.

He said that Pangolin has done this before and recently also successfully fought for a higher offer price from Selangor Properties Bhd in Malaysia.

For Challenger's case, for weeks leading up to the EGM, the company had published its research on its website and asked shareholders to contact the company if they were planning to vote against. The combined shareholding, "within a couple of weeks" approached 10 per cent, including Pangolin's stake of 2.94 per cent.

The current regulations allow holders of more than 10 per cent present and voting to veto a voluntary delisting deal.

Asked what he hopes the company will do with the episode now behind itself, he said: "Mr Loo (referring to Challenger's chief executive officer Loo Leong Thye) should probably, I would hope, stop talking to Dymon (Asia) and just work through all of us."

Dymon Asia Private Equity owns 30 per cent of the offeror, Digileap Capital, while the Loo family owns the remaining 70 per cent.

Mr Hay also brushed off Mr Loo's comments two weeks before the EGM saying that Pangolin had earlier made two unsolicited offers to sell its stake to the majority shareholder.

He said that Pangolin is a fund manager, answerable to its own shareholders, but so far has remained committed to investing in the company, having remained an investor for the past nine years.

He added, not in jest, that Mr Loo should be happy with the outcome too. "Because actually people are saying we want to remain shareholders in your company, Mr Loo."