Oversea-Chinese Banking Corporation Limited (OCBC) has announced its support for Great Eastern Holdings Limited's (GEH) proposal to delist its shares. OCBC is backing this move with a S$0.9 billion conditional exit offer, pricing each share at $30.15 for the 6.28% of GEH shares it does not already own.
The trading of GEH shares was halted on July 15, 2024, due to the insurer's free float dropping below 10%. This suspension has lasted for 11 months, during which shareholders were unable to sell their shares. The proposed exit offer now provides them with an opportunity to do so.
Ernst and Young, acting as the independent financial adviser, has stated that the exit offer is "fair and reasonable."
GEH aims to proceed with delisting after considering various options and assessing their practicality and feasibility. Should delisting not be feasible, GEH plans to seek shareholder approval for an alternative proposal aimed at restoring the free float.
OCBC’s offer is contingent upon obtaining at least 75% approval from GEH shareholders in favor of a delisting resolution during an extraordinary general meeting (EGM). OCBC itself will not participate in voting on this resolution.
If approved, GEH will be removed from SGX’s Main Board, and shareholders who accept the exit offer will receive payment. Those who decline will retain ownership of shares in an unlisted company.
Should the resolution fail, the exit offer will lapse. In that case, GEH intends to propose issuing new ordinary Bonus Shares alongside Class C Non-Voting Shares as part of a strategy to meet free float requirements.
All shareholders are eligible for Bonus Shares unless they choose Class C Non-Voting Shares instead. OCBC plans to vote in favor of this bonus issue resolution and opt for Class C Non-Voting Shares upon request by GEH.
Helen Wong, CEO of OCBC Group, commented: “While we have never wavered in our strategic intention to delist Great Eastern, this offer is made to avail to GEH shareholders the opportunity to exit the stock after an 11-month suspension in share trading."
OCBC confirmed that its current exit offer price is final with no intention for another future bid. Ernst and Young also validated this latest price as fair and reasonable based on several financial metrics compared with similar companies.
Documents related to these proceedings including electronic copies of relevant notices are expected on SGX-ST's website starting June 9th.
The outcome following EGM decisions will determine if further actions or resolutions are required concerning shareholder agreements regarding both exiting or retaining positions within either listed or unlisted formats respectively.