A group of minority shareholders has expressed dissatisfaction with OCBC‘s final bid to purchase the remaining shares of Great Eastern, as reported by Channel News Asia.
OCBC, which has been the majority shareholder of Great Eastern for the past two decades, recently proposed a S$1.4 billion offer to buy the remaining 11.56% stake in Great Eastern Holdings Limited.
By June 13, OCBC had increased its ownership to 89.01 percent, having secured acceptances for an additional 1.74 million shares.
According to a circular released after market close on Friday (14 June), Great Eastern’s independent directors were advised to recommend that minority shareholders accept the S$1.4 billion offer.
The independent financial adviser, Ernst & Young (EY), described the offer as “not fair but reasonable.”
EY noted that the offer price fell short of their valuation range of S$28.87 to S$36.19 per share and represented a 30 percent discount to Great Eastern’s reported embedded value as of the end of 2023.
Despite these issues, EY considered the offer reasonable due to the stock’s low trading volume, historical price trends, and the low probability of rival bids, given OCBC’s dominant shareholding.
EY also highlighted the risk of a trading suspension if the public float drops below the 10 percent threshold required by the Singapore Exchange (SGX).
Meanwhile, OCBC reiterated that its offer would remain unchanged, with the closing date extended to 12 July 2024. The bank emphasised that it does not plan to increase the offer price or further extend the deadline.
On Friday, Great Eastern’s shares closed 0.27 percent lower at S$26.10, valuing the company at approximately S$12.35 billion.
Featured image credit: Edited from Freepik
