Special-purpose vehicle with Teo family group offers S$3.50 per share cash offer for Shinvest Holding

A SPECIAL-purpose vehicle with members of the Teo family group on Wednesday (Feb 16) announced its intention to make a voluntary conditional cash offer of S$3.50 per share to acquire all the shares of Shinvest Holding.

The announcement was made on the Singapore Exchange (SGX) by UOB, the financial adviser to the offeror.

Two of the shareholders of the offeror vehicle are Shinvest's managing director Teo Teck Leong and executive director Teo Eng Thian. Another two are key executives of Shinvest's subsidiary Sin Hong - Teo Eng Hwee, the chief executive of Sin Hong Group (comprising Sin Hong and its subsidiary), and Teo Eng Shing, named in Shinvest's 2021 annual report as an executive director of Sin Hong.

Teo Eng Thian, Teo Eng Hwee, Teo Eng Shing are nephews of Teo Teck Leong. All four are also directors of the offeror vehicle, and substantial shareholders of Shinvest. In the terms of the offer, these four are also collectively known as the Teo family group.

As at Wednesday (Feb 16), the Teo family group held some 8.7 million shares of Shinvest, which constitutes about 29 per cent of the total number of issued shares of the company. Irrevocable undertakings have been given in respect of these shares by the Teo family group.

As at the offer announcement date, there were about 29.9 million issued shares of Shinvest.

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The offer price represents a premium of 12.9 per cent over Shinvest's last traded price per share of S$3.10 on Feb 15, the last market day before the offer was announced.

It also represents a premium of 8.5 per cent, 10.2 per cent, 10.1 per cent and 14.3 per cent respectively over the volume-weighted average price per share for the 1-month, 3-month, 6-month and 12-month periods up to and including Feb 15.

Shinvest, together with its subsidiaries, is an industrial group that is also one of the largest stockists, distributors and manufacturers of a wide range of industrial fasteners. The group serves customers in Singapore as well as in the US, Europe, Malaysia, Indonesia and China.

UOB noted that there has generally been a low trading liquidity of shares, with the average daily trading volume coming in at 1,520 shares, 4,691 shares and 3,926 shares during the 1-month, 3-month and 6-month periods up to and including Feb 15. This represents less than 0.02 per cent of the total number of issued shares for each of the relevant periods.

"The offer therefore provides shareholders who find it difficult to exit the company as a result of the low trading volume in the shares with an opportunity to liquidate and realise their investment in the shares at a premium to the prevailing market prices, which may otherwise not be available, given the low trading liquidity of the shares," said UOB.

The offer also presents a "clean cash exit opportunity" for shareholders to realise their investment at a premium over the prevailing trading prices of the shares without incurring brokerage costs and other trading costs.

Another reason behind the offer is to allow the offeror to increase its stake in the company to more than 50 per cent, which grants it statutory control of the company; this means the offeror and the Teo family group will have better control or influence over the business and future plans of the group.

The Teo family group does not intend to make major changes to the business of the company or its management team, re-deploy the fixed assets of the company, or discontinue the employment of the employees of the company or its subsidiaries.

If Shinvest gets offer acceptances exceeding 90 per cent of the total number of issued shares, SGX-ST will suspend trading of the shares at the close of the offer.

UOB said Shinvest does not intend to undertake or support any action for any trading suspension of the shares to be lifted in the event that less than 10 per cent of total shares are held in public hands after the period.

If the Teo family group receives valid acceptances of not less than 90 per cent of shares not already held by it, it will be entitled to exercise the right to compulsorily acquire all the shares of the shareholders who have not accepted the offer.

The Teo family group will then exercise its right to compulsorily acquire all shares not already acquired under the offer, and will proceed to delist the company from SGX.