SINGAPORE: The trading of Great Eastern shares will be suspended from Monday (Jul 15) as less than 10 per cent of the listed company is now owned by the public, the insurer announced late on Friday.
OCBC's takeover offer for Great Eastern closed on Friday, with the bank holding more than 93 per cent of the company.
As of 5.30pm on Friday, the bank had 93.32 per cent of its total shares, up from the 88.44 per cent it originally had two months ago when it first announced a S$1.4 billion (US$1.03 billion) offer to buy the remaining stake, according to a Singapore Exchange (SGX) filing.
Under SGX rules, listed companies must maintain a free float – shares held by the public – of at least 10 per cent. If this threshold is not met, SGX may suspend trading of the company's shares.
In its offer document, OCBC stated that it would not take any steps to maintain the listing status of Great Eastern if the free float requirement is not met and trading is suspended.
For now, under the Companies Act, shareholders who did not accept OCBC's offer will have a right to require the bank to buy them out at the offer price.
The bank had offered a price of S$25.60 per share on May 10, which it said represented a premium of 36.9 per cent over Great Eastern's then last traded price of S$18.70.
Shares of Great Eastern closed at S$25.80 on Friday.
In a statement, the insurer said OCBC's offer and the trading suspension would have no impact on its business and operations.
"There are no changes to policyholders' insurance contracts with Great Eastern," said the insurer. "Policyholders will continue to be well served by Great Eastern and its financial representatives."
Mr Khor Hock Seng, group chief executive officer of Great Eastern, said: "Our financial strength remains solid as before, and arguably stronger based on the increased market value of our shares following the announcement of the offer."
On Jun 14, Ernst & Young – the independent financial adviser appointed to the deal – described the terms of OCBC's offer as "not fair but reasonable". However, it advised Great Eastern's independent directors to recommend that minority shareholders accept the offer.
Later that day, OCBC said in a separate statement that its offer price was final and extended the closing date of its offer to Jul 12, disappointing shareholders.
In the following week, retail investor watchdog Securities Investors Association Singapore (SIAS) posed questions to OCBC, saying the bank's privatisation bid for its insurance arm created a "dilemma" for Great Eastern's smaller investors.
https://www.channelnewsasia.com/business/ocbc-great-eastern-insurance-takeover-offer-closes-4475296
