Citic Envirotech buyout offer 'fair and reasonable', says IFA

THE buyout bid for mainboard-listed Citic Envirotech has been deemed fair and reasonable by the deal's independent financial adviser (IFA), according to a circular on Monday fixing the vote on the privatisation offer.

In keeping with Novus Corporate Finance's advice, the company's independent directors have recommended that shareholders accept the S$0.55-a-share offer that was launched by the majority owner, Citic Group Corp's Citic Environment Investment Group, in November.

Among other factors, the IFA noted in its assessment that, although the exit-offer price represents a significant discount to a placement price of S$0.85 in a 2018 placement, it is still higher than the last closing price of S$0.37 before the offer kicked off.

Also, "the offeror already has statutory control over the company" and can significantly influence management, operating and financial policies, Novus Corporate Finance added.

The offeror, CKM (Cayman) Company, held about 56.36 per cent of the shares as at Dec 9.

The offeror has said that it plans to take Citic Envirotech private "to have a longer horizon to manage and plan its business", with more control and flexibility for the management, and sans the compliance costs of maintaining a listing.

The extraordinary general meeting, where shareholders will decide on the delisting, is to be held at Ballroom 1 of Amara Hotel on Dec 31 at 10am, the company said in Monday's notice.

Under bourse rules, the delisting resolution must be approved by a vote that represents at least 75 per cent of the shares held by shareholders at the meeting, and the offeror and its concert parties must abstain from voting on the resolution.

Citic Envirotech shares closed flat at S$0.54 on Monday.