Takeover bid for Spindex Industries heats up

THE takeover bid for Singapore-listed Spindex Industries Limited has heated up.

In early February this year, Spindex received a cash offer from its founding Tan family, who offered to acquire all the shares of the group at 85 Singapore cents apiece under a scheme of arrangement.

The takeover offer was to be undertaken through private vehicle Hong Wei Holdings Ltd, which said it intends to delist the group.

Hong Wei is owned by Spindex chairman Tan Choo Pie, his spouse, as well as his son Tan Heok Ting. At that time, the Tans collectively owned a 25.47 per cent stake in Spindex.

But on Friday, Hong Wei's financial adviser DBS Bank, said that Mr Tan has on the same day, agreed to buy a 14.69 per cent stake in Spindex at 85 cents apiece. This raises Hong Wei's stake in Spindex to 44.68 per cent.

As a result of this, Hong Wei is required to make a mandatory general offer for Spindex's remaining shares. The offer price of 85 cents a share stands.

In relation to this development, an application was made to the Securities Industry Council of Singapore (SIC) and the SIC has consented to the termination of the scheme of arrangement announced in February.

On Friday, Spindex said in a separate filing that the independent directors had on Feb 23 received an unsolicited letter from a third party with a request to conduct due diligence on it.

"The letter did not contain any offer or indicative terms. The independent directors had on March 1, 2017, responded to the third party to inform that the independent directors were not at that point in the position to consent to the request for access to conduct due diligence on the company," Spindex said.

It added that on March 2, the independent directors received a further letter from the same third party, requesting for access to its information.

The independent directors have responded to the third party to request it to specify the questions to which it requires, Spindex said.

Following Spindex's filing, Star Engineering Limited on Friday said that it is "considering all options", including potentially making a conditional offer for the shares in Spindex "at higher than the offer price of S$0.85 per share that is reflected in the Mandatory Conditional Offer Announcement by DBS Bank Ltd, for and on behalf of Hong Wei Holdings Ltd".

Star Engineering, a subsidiary of Northstar Equity Partners IV Limited, an investment fund advised and managed by Northstar Advisors, said that it would issue a letter to Spindex for the former to be permitted to carry out due diligence.

It added that shareholders of Spindex should note that "there is no certainty or assurance that an offer for Spindex will materialise and/or that a firm intention to make any offer will be announced by or on behalf of Star".