Lessons from the voluntary cash offer for TTJ

THE lowball privatisation offer for construction engineering company TTJ Holdings was declared unconditional earlier this month, as the level of acceptances pushed the offeror’s stake past the 90 per cent threshold.

It was clear to investors from the outset that the offer price of S$0.23 per share was not only inadequate, but that TTJ’s executive chairman Teo Hock Chwee was exploiting a loophole in the law which would enable him to more easily reach the compulsory acquisition threshold.

The Companies Act allows an offeror to exercise the right of compulsory acquisition once it obtains 90 per cent of a target company’s shares that it and its related companies do not already own.