TDCX minority shareholder wants MAS, SEC to scrutinise privatisation offer

A MINORITY investor of digital advertising solutions provider TDCX has filed a complaint with the Monetary Authority of Singapore and the US Securities and Exchange Commission (SEC), asking the regulators to scrutinise a privatisation deal that is underway.

In particular, the shareholder V Mittal has drawn attention to Goldman Sachs’ role in the transaction. Goldman Sachs (Singapore) is serving as financial adviser to the group that is buying out the minority shareholders of TDCX.

Mittal noted in the letter, a copy of which was seen by The Business Times, that Goldman Sachs & Co had acted as an underwriter in TDCX’s initial public offering (IPO).

TDCX raised US$349 million in an IPO in October 2021, selling its shares at US$18 each. The stock hit a peak of US$28.68 that same month but quickly lost momentum. It has not traded above US$10 since March 2023.

In January, TDCX’s founder, Laurent Junique, proposed to buy out minority shareholders and take the company private at US$6.60 per share.

The offer price has since been raised to US$7.20 per share – a premium to where TDCX was trading before the buyout announcement, but a disappointment to shareholders who had bought into the company’s story just a few years ago.

With the likes of Meta and Airbnb on its client list, TDCX had been touted by brokers as a tech disruption play.

According to Mittal’s letter, Goldman Sachs had a “strong buy” rating on the stock, starting with a price target of US$30.30 in November 2021.

Goldman Sachs Asset Management also held a 9.4 per cent stake in TDCX as at Feb 8.

Mittal told BT that his intent is not to stop the privatisation, but to get the regulators to scrutinise the parties in such transactions.

This is not Mittal’s first activist move. After Junique’s offer was announced, Mittal had written to TDCX’s board and to a special committee convened by the board to consider the privatisation offer.

In his letters, he proposed share buybacks to boost the stock. He also asked that the special committee provide shareholders with access to its report, or take input from minorities.

TDCX has responded to queries about the privatisation process, saying the company has adhered to all relevant legal requirements from the SEC and the Cayman Islands, where it is incorporated. The special committee comprising independent and disinterested directors was formed to consider the previous non-binding proposal dated Jan 2 from Junique.

“All minority shareholders had a communication channel with the special committee throughout the evaluation process. The special committee has received and considered views of minority shareholders and, where relevant, concerns were deliberated as part of the evaluation process,” said TDCX.

It added that information on the company and merger was released in a timely matter via the Schedule 13E-3 transaction statement in an SEC filing on Mar 1, as well as on the investor relations site.

BT has reached out to Goldman Sachs for comment.

Shares of TDCX closed at US$7.12 in the US on Thursday (Mar 14).