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Raffles United says will not restore free float if trading is suspended

WATCH-LISTED bearings and seals supplier Raffles United said on Tuesday that it does not intend to restore its free float in the event that the Singapore Exchange (SGX) suspends trading in its shares.

So shareholders who do not accept the exit offer of S$0.065 in cash per share must “carefully evaluate the risk” of holding shares in a suspended or delisted company, Raffles United said.

Raffles United’s public float fell below the minimum 10 per cent threshold last week.

It said it intends to take steps to delist after the offer closes at 5.30 pm on Aug 14, although it is not clear if it will be allowed to delist.

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There is no word yet from the SGX on whether Raffles United’s delisting bid will be panned, but under the old SGX listing rules (the general offer for Raffles United’s shares was launched before new rules took effect on July 11), an issuer cannot delist unless shareholders are given a “reasonable” exit offer, in the opinion of an independent financial adviser (IFA).

Here lies the ambiguity.

Asian Corporate Advisors, the IFA for Raffles United, has opined that the exit offer for Raffles United is “not reasonable from a financial point of view”, for the same reasons it used to explain why the offer is not fair.

When asked to clarify its position, a spokesperson for Asian Corporate Advisors said: "The Securities Industry Council stipulates that in considering whether an offer is 'reasonable', the IFA should consider other matters as well as the value of the offeree securities. The factors (we) highlighted as reasons for 'not reasonable' are just summary and not the entire factors which we considered. Those factors highlighted are the key and main factors but does not mean that we have not considered other factors such as the liquidity of the shares and the existing voting rights in the offeree company held by the offeror and its concert parties."(see clarification note)

It added: "Our opinion is a summary of the whole letter, and shareholders have been advised to read the letter in its entirety. On reasonableness it was stated that it is on balance and after factoring including but not limited to the factors listed therein."

If Raffles United is not allowed to delist, its shares will remain suspended.

The offeror has said that the offer price will not be revised.

The offeror, a vehicle for executive director Teo Xian-Hui Amanda Marie, controlled 92.14 per cent of all issued shares at the end of Monday.

Clarification Note: This article has been edited to reflect the clarification from Asian Corporate Advisors.