Property tycoon Koh Wee Meng, via an entity called JK Global Wealth, plans to privatise another developer Global Dragon , which he controls, with an offer of 12 cents per share.
Back in October 2021, Koh Wee Meng had privatised Fragrance Group, another company that he controls.
As at Feb 10, Koh and his related parties already control 81.98% of Global Dragon, or some 559.06 million shares.
Koh Wee Meng controls Global Dragon with his deemed stake of 59.3%, or more than 400 million shares held via an entity called JK Global Assets.
According to the offer document released on Feb 10, JK Global Assets has given an irrevocable undertaking to the offeror, JK Global Wealth.
The second largest shareholder of Global Dragon is Tan Su Lan @ Tan Soo Lung, mother of Koh Wee Meng.
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Koh Kian Soo, Global Dragon's executive chairman, is the brother-in-law of Koh Wee Meng. Ko Lee Meng, wife of Koh Kian Soon, is another substantial shareholder of Global Dragon.
According to the DBS, acting on behalf of JK Global Wealth, the offer presents shareholders with an opportunity to realise their investment in Global Dragon at a premium of around 14.3% over its last traded price 10.5 cents on Feb 7, before the offer was made.
The offer price is also a 15.4% premium over the 1-month volume weighted average price and a 17.6% over the corresponding 12-month figure.
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As at Dec 31 2022, the company's net asset value was 12.18 cents, which implies the 12 cents per share offer price at 0.99 times multiple, and 52.3% higher than Global Dragon's 3-year historical average of 0.65 times.
Global Dragon, as at Feb 10 2023, has two ongoing property development projects.
Both are landed residential developments. The first along Jalan Daud and the other along Woo Mon Chew Road. Both projects are likely to receive their respective TOPs by end of the current FY2023 ending June 30 2023.
In its property investment segment, Global Dragon owns 12 units of 999-year leasehold office units in the CBD, with an average tenancy of 87%.
Global Dragon has a 194-room hotel along Telok Blangah Road under construction. The hotel is likely to receive its TOP in 1HFY2024 ending Dec 2023.
