More two-tier offers possible - with caveats

Singapore

CONGLOMERATE Keppel Corp's recently concluded two-tier takeover offer for its listed property arm is the first deal with two price rungs in at least five years and could spark more similarly structured corporate buyout bids here, industry observers said.

Such offers could suit firms that intend to privatise a company they already own a controlling stake in, where the target stock is highly liquid, they noted.

However, they added the caveat that two-tier bids are likely to remain relatively uncommon, warning that such a structure may inadvertently encourage shareholders to wait until the last minute to accept.

"Two-tier pricing structures may become more common after Keppel has blazed the way," said law firm Lee & Lee's corporate head Adrian Chan. "There'll be increased awareness, and I think generally people feel that the two-tier pricing structure did manage to i…