Site icon Alpha Edge Investing

IFA advises Hwa Hong’s board of directors to accept revised offer of 40 cents


Goola Warden Tue, Jun 14, 2022

Hwa Hong Corp’s shareholders have officially received an offer of 40 cents per share, as indicated in a circular that was released on the evening of June 14. This is three cents higher than the 37 cents offer in May. The offeror is a consortium formed by Ong Eng Yaw, one of the six Ong brothers who own Hwa Hong, Together the consortium (offeror) owns 24.7% of Hwa Hong. This coupled with some acceptances has boosted the offeror’s stake in Hwa Hong to 24.86%.

The offeror says it does not intend to revise the 40 cents offer except in a competitive situation. The revised offer closes on June 28 unless it turns unconditional in which event it will remain open for another 14 days.

The offer price represents the highest price for Hwa Hong over a nine year period up to May 12, after which the initial offer of 37 cents was made.

According to the offeror, the Company, as with many property-related businesses, faces a challenging and unprecedented macro and operating environment driven by Covid, geopolitical tensions and Brexit. “The Offeror is of the view that the Offer represents an attractive opportunity for Shareholders to exit their investment in an uncertain economic environment,” the circular says.

Provenance Capital, the independent financial adviser, is advising shareholders to accept the offer. “Based on our analysis and after having considered carefully the information available to us as at the Latest Practicable Date, overall, we are of the view that the financial terms of the Offer (i.e. the Revised Offer Price) are fair and reasonable. Accordingly, we advise the Recommending Directors to recommend Shareholders to ACCEPT the Offer.”

Provenance Capital goes on to suggest that shareholders who wish to realise their investments can choose to sell their shares in the open market if they can obtain a price higher than the revised offer.

The offer is subject to the Minimum Acceptance Condition and the Offer is not yet unconditiona. “Shareholders should therefore note that if the Minimum Acceptance Condition is not met by the close of the Offer, the Offer will lapse and all Shares tendered will be returned to the respective Shareholders. Accordingly, Shareholders who accept the Offer will only have the certainty of the consideration of the Revised Offer Price in cash when the Offer has been declared to have become unconditional in all respects,” Provenance Capital says.

Exit mobile version