Chip Eng Seng shareholders should reject the raw deal offered by the Tangs

A MAJOR shareholder is again trying to buy up an unloved listed property group at a discounted price. Gordon and Celine Tang are making an offer for Chip Eng Seng (CES), with an eye to privatising it.

As a shareholder of CES, I intend to reject the offer because the price is too low. The couple’s Tang Dynasty Treasure made a final offer of S$0.75 cash per CES share. And the offeror will exercise its right of compulsory acquisition to buy up all the shares of CES if it hits the 90 per cent shareholding mark.

The offer price is at a discount of 24 per cent to CES’ net asset value (NAV) per share of S$0.9906 as at end-June 2022. The group’s NAV could be conservative. CES has an exciting property development pipeline in Singapore, where demand drivers for private homes and Grade A office space are strong. The group’s construction business is profitable, and better days may lie ahead for its hospitality business.