Golden Energy’s big deal: IFA evaluation of exit offer warrants closer examination by regulators

The proposed break-up and delisting of Golden Energy and Resources (Gear) is widely seen to be unfavourable for minority investors. But one shareholder of the company thinks the deal also breaches the spirit, if not the letter, of the Singapore Exchange’s (SGX’s) rules on delistings and exit offers.

Jeremy Raper, a full-time private investor who claims to own three million Gear shares, told me last week that he has conveyed his misgivings about the deal to the Monetary Authority of Singapore, the Securities Industry Council as well as SGX. He is hoping this will trigger an official examination of the proposed transaction, and improved terms for minority shareholders of Gear.

What exactly is the problem with the deal? The appointed independent financial adviser (IFA) is being asked to opine on whether the proposed distribution in-specie of Gear’s controlling stake in Indonesia-listed Golden Energy Mines (Gems) and the subsequent exit offer for Gear at S$0.16 per share – when taken together as a single transaction – are fair and reasonable.