TTJ privatisation offer ‘unfair’

THE offer for TTJ Holdings is, in my opinion, deeply unfair to minority shareholders. The consideration of 23 cents per share represents a 37.5 per cent discount to TTJ's unaudited net asset value per share of 36.79 Singapore cents as of Jan 31.

If shareholders were to simply receive the net asset value that their shareholding represents, it would be 60 per cent higher than the current offer.

TTJ executive chairman Teo Hock Chwee's intention is to increase his shareholding to 90 per cent, and then exercise his right to compulsorily acquire the shares of remaining holders, including those who do not support the deal.

As the announcement notes, the offer is structured so as not to be subject to rules 1307 and 1309 of the listing manual, which protect minority shareholders, including by requiring exit offers to be "fair and reasonable". In my opinion, Teo's offer is neither fair nor reasonable, and it deeply undervalues the company. There is no justification for the offer to be at such a large discount to TTJ's net asset value.

Teo should make a fair exit offer rather than seeking to enrich himself at the expense of minority shareholders.

Patrick Wright