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TIH flags uncertainty over Mitsui Life lawsuit

TIH Limited - the subject of a takeover that values the fund at more than S$60 million - on Thursday flagged the uncertain impact that the ongoing legal dispute over its Mitsui Life Insurance stake would have on its net asset value (NAV).

Majority shareholder Argyle Street Management this week announced that it has joined Lippo China Resources to make a voluntary unconditional offer for all of the shares of TIH.

The offer price of S$0.57 for each share represents a premium of about 9.6 per cent to the referred NAV of S$0.52. In the offer announcement, it was noted that this NAV does not include the contingent benefit that TIH may realise if it wins the lawsuit related to an investment in Mitsui Life Insurance.

TIH owned 7.64 per cent of Mitsui Life Insurance indirectly through an investment holding firm, and Mitsui was later taken over by Nippon Life in 2016.

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On the claim that the stake was undervalued, TIH applied to the Japanese court for it to appraise the value of Mitsui Life Insurance shares.

TIH said that the potential amount that TIH might receive could range from nothing to S$165 million, before taxes, fees and expenses. It said that there is no certainty over its odds of winning, or on the final amount to be awarded to TIH.

The offer from Argyle Street and Lippo China Resources would value TIH at S$66.6 million, after taking in the interest payable on notes used as part of payment for the proposed acquisition.

The offer is to be paid via a combination of cash and an issue of three-year senior unsecured notes that would pay a coupon of 2.25 per cent.

Argyle Street and Lippo China Resources said that they intend for TIH to keep its listing status in Singapore and to continue with its existing activities. They said that they do not intend to introduce any major changes to its business.

TIH closed higher on Thursday at S$0.535, up 0.5 Singapore cent.