Market watchers say Golden Energy exit offer unfair, results for shareholders uncertain

COAL miner Golden Energy and Resources (Gear) has announced that it wants to exit the thermal coal business and delist from the Singapore Exchange (SGX), but market watchers said that the deal terms may not be favourable to the company’s shareholders.

Phillip Securities analyst Terence Chua said that while the total consideration is higher than the counter’s last traded price and net asset value before the offer was announced, shareholders could wind up disappointed as the offer is below the “overall SOTP (sum of the parts)” of the company.

Gear on Wednesday (Nov 9) sounded its intention to give shareholders an option of cash, or a combination of cash and shares, to delist from SGX.