SINGAPORE (June 12): Perennial Real Estate Holdings’ substantial shareholders have joined forces with Chinese asset manager HOPU Fund Management Company to privatise the company.
The shareholders in concert include chairman Kuok Khoon Hong, vice chairman Ron Sim and CEO Pua Seck Guan, the company said on June 12.
The consortium, which already holds 82.43% of the company, is offering 95 cents per share and will not revise the offer. It last traded at 69 cents on June 9 before trading was halted on June 10 ahead of this announcement.
The offer is conditional upon the offerors achieving shareholding of not less than 90% in Perennial.
When so, HOPU will then fund the balance 17.57% of shares to be acquired from the minority shareholders.
“The offer represents an opportunity for shareholders to realise their investment in the Shares at a premium amidst economic uncertainty driven by the COVID-19 pandemic,” the company said.
The offerors also want greater flexibility to raise capital in support of Perennial’s future growth, giving its pipeline of large scale integrated development projects.
“The general decline in Perennial’s Share price has made it challenging to raise equity capital, compounded by the potential dilution to shareholders’ interests,” the company said, adding that it has not raised funds via equity over the past five years, preferring to sell bonds instead.
“By privatising Perennial together with HOPU, the consortium believes Perennial will be able to secure a new long-term capital partner and tap on the track record and experience of HOPU and its affiliates,” the company said.
“In addition, Perennial will have greater flexibility to obtain equity funding from the Consortium and private sources, which will allow it to operate more efficiently in achieving its growth objectives,” the company added.
The privatisation offer was already hinted back in May 18, when the company said that “substantial shareholders” are “reviewing the options”, following a 14.85% surge in its share price earlier that day.
