Hong Kong's Lippo makes S$63.1m joint offer for TIH shares

Singapore

TIH Limited could be set for an ownership shake-up, to the tune of as much as S$66.6 million.

Majority shareholder Argyle Street Management has joined Lippo China Resources to make a voluntary unconditional offer for all of the shares in the Singapore-listed closed-end fund.

The offer price is S$0.57 a share, to be paid in a combination of cash and the issue of three-year senior unsecured 2.25 per cent notes, according to the offer announcement that TIH filed with the Singapore Exchange after the market closed on Monday.

This is a premium of 12.87 per cent over the last traded price of S$0.505 before the news came out.

Based on Argyle Street Management's 54.2 per cent stake, this offer would work out to about S$63.1 million in all for the remaining shares, and interest payable on the offeror notes brings the consideration for the deal up to around S$66.6 million.

Hong Kong's Lippo Ltd owns about 75 per cent of Lippo China Resources.

The two Lippo companies said in a Tuesday morning announcement on the Stock Exchange of Hong Kong: "TIH, as a well established closed-end fund in Singapore which focused in investment in various sectors in Asia, matches the group's strategy to expand their scope of business in securities and fund investments in Asia."

The bid vehicles and their parent firms may transfer TIH shares among themselves after the close of the offer, according to the offer document.

Such transfers, if made, would be done at the offer price and completed within 12 months of the offer close.

Argyle Street Management said it struck the deal because some of the funds that it manages are maturing and it is "under a duty to provide the investors in such funds an opportunity to exit in an orderly manner".

Also, some of its investors would prefer to divest certain illiquid holdings from the fund's parties that now have their money in TIH.

But Argyle Street Management "continues to believe in the underlying value of TIH over the long term", the hedge fund added.

It said that bringing in Lippo China Resources as a shareholder with joint control of TIH will boost the Singapore fund's ability to find investment opportunities, given Lippo China Resources' "extensive access and network to significant strategic players".

The joint offerors said that they intend for TIH to keep its listing status in Singapore and to continue with its existing activities, and have no intention of introducing any major changes to the its business.

TIH closed higher on Tuesday at S$0.53, up 2.5 Singapore cents.