Ensuring IFA independence is crucial
In an ideal world, the independent financial adviser would be appointed by an external party – possibly regulators or even Sias – and should not receive payment from target companies
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WITH very few exceptions, most privatisation-cum-delisting offers are met with outrage from minorities who feel that the “lowball’’ offers that are typically made severely undervalue their shares.
This reaction is perfectly understandable – sellers will always want as high a price as possible, while buyers will always pitch their offers as low as possible.
Regulators are understandably reluctant to intervene, partly because the rules surrounding such deals have already been fine-tuned to ensure that offers are “fair and reasonable’’ and mainly because an independent financial adviser (IFA) has to be appointed to provide advice to minorities on fairness and reasonableness.
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