Fairfax Asia making cash offer of S$0.3535 a share for Singapore Reinsurance with a view of delisting

Singapore

FAIRFAX Asia is making a cash offer for Singapore Reinsurance's 71.82 per cent stakes that it and its concert party do not own, at S$0.3535 a share, conditional on them garnering more than 50 per cent stakes.

It said the offer price represents a premium of 20.6 per cent over the volume-weighted average price per share for both the one-month and three-month periods, and a premium of 21.9 per cent and 27.6 per cent over that for the six-month and 12-month periods respectively up to and including March 18, when the counter closed at 29.5 cents.

The offer price is at a price-to-book ratio of 0.79 time.

The counter has traded below the offer price for the past 10 years up to March 18, Fairfax Asia added in the offer announcement filed to the Singapore Exchange late on Friday.

Singapore Reinsurance is principally engaged in the business of underwriting general reinsurance, and also involved in investment activities of its non-reinsurance funds.

The acquisition presents shareholders with an opportunity to exit their investment in the general reinsurer at a premium over the prevailing trading share prices without incurring brokerage and other trading costs, Fairfax Asia said.

It noted the challenging macroeconomic environment which may pose concerns to the underwriting and investment activities.

It further said that shareholders who might have difficulties in selling their shares because of the low trading volume could use this opportunity to realise their investment at a premium over the prevailing market prices.

Fairfax Asia intends to delist after obtaining more than 90 per cent of stakes.

The company, a subsidiary of Fairfax Financial Holdings, is incorporated in Barbados.

It stated that being in control of Singapore Reinsurance will allow it and its concert parties to achieve several objectives including managing the operations with a view to stabilising the volatile reinsurance business for the long term, optimising capital resources as well as exploring business synergies with related companies across Asia.

The counter rose 1.7 per cent to SS0.30 on Friday.