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Deadline to accept offer for Wheelock Properties extended to Sept 21

THE offer by Hong Kong-listed parent Wheelock and Company to buy out minority shareholders' stakes in Singapore-listed Wheelock Properties has been extended to 5.30 pm on Sept 21.

The offer extension was announced on Friday evening, ahead of the original 5.30 pm offer acceptance deadline.

So far, only 1.4 per cent of Wheelock's shareholder base have tendered their shares for cash.

That brings the offeror’s resultant shareholding to 77.6 per cent. It owned 76.2 per cent of Wheelock Properties when the offer was launched.

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The offer is unconditional but has not been declared final.  The offer acceptance deadline can be extended yet again, so long as an announcement is made by 5.30 pm on Sept 21.

Shares in Wheelock Properties closed unchanged at S$2.17 on Friday, above the offer price of S$2.10 per share, supported by speculation that the offer price might be raised.

Although the offer price is higher than anywhere that Wheelock Properties shares have closed since 2011, Wheelock sits on a huge cash pile and the offer price represents a 26 per cent discount to Wheelock's adjusted ex-cash price-to-net asset value, the independent financial adviser has noted.

The offeror wants to privatise Wheelock Properties.

If the company’s free float falls below 10 per cent, it can delist, although shareholders who reject the offer would go private together with Wheelock and Co.

But if the offeror wants to go for a “clean” privatisation, it will need to get valid acceptances from 90 per cent of minority shareholders, which amounts to 21.4 per cent of Wheelock’s share capital, in order to force a compulsory acquisition of all the shares it does not own.

In the case that the offer lapses without any hike in the offer price, it remains to be seen how the market will react.

Valuations for stocks with a large exposure to Singapore’s residential property market have been crushed since more cooling measures were piled on in July, but Wheelock Properties has had muted land banking activities here since 2013. Its last successful land tender took place in January 2013 for The Panorama, which is fully sold.