Privatisation offers continue, but shareholders increasingly discerning

WEAK market sentiment and depressed stock market valuations are motivating substantial shareholders to take Singapore-listed companies private, with 10 such deals announced this year – continuing a multi-year trend. But as the impact of Covid-19 wanes, the market is showing signs of resisting offers that are particularly opportunistic.

Shareholders appear to be paying closer attention to details of takeovers, and are chasing better deal terms. This has resulted in offerors hiking their offer prices, extending offer deadlines, or having to shelve their plans altogether.

Justin Tang, head of research for Asia at United First Partners, said some offerors are buying out companies because they “clearly see a mismatch in the company’s intrinsic value, future prospects and the stock price”.