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OCBC’s offer to Great Eastern shareholders ‘not fair but reasonable’, shareholders should accept it: EY
Prisca Ang
Business Correspondent
UPDATED JUN 14, 2024, 09:52 PM
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SINGAPORE – OCBC’s offer to buy the remaining shares of Great Eastern from minority investors is “not fair but reasonable”, said independent financial adviser Ernst & Young Corporate Finance on June 14.

In a separate statement after EY’s filing to the Singapore Exchange, OCBC said its $25.60 a share offer price is final and will not be increased. The bank also extended the offer’s closing date from June 28 to July 12.

OCBC made a $1.4 billion bid on May 10 to take its insurance arm GE private following recent shareholder unhappiness over falling returns. Its voluntary, unconditional general offer was for the 11.56 per cent stake in GE that it does not own.

1 month ago

The offer price represented a 36.9 per cent premium over GE’s closing price of $18.70 on May 9. However, it was also 30 per cent lower than the insurer’s $36.59 per share embedded value as at the end of the insurer’s last financial year.

OCBC had received acceptances for 1.74 million GE shares, or 0.37 per cent of the total, as at the end of June 13.

This raises the bank’s stake in GE to 88.8 per cent, and to 89.01 per cent if the number of shares held by OCBC’s concert parties is included. Concert parties refers to a group of investors who buy shares in the same company.

1 month ago

Ocbc has to offer a higher price if not cannot delist as offer is unfair but reasonable

1 month ago

speakup

Life is not fair

1 month ago

Think OCBC will easily reach 90% by the July 12 deadline. Game over?

1 month ago

Under SGX rules, using Boustead Projects as an example in '23, even if 90% reached, in order to DELIST the co. the offeror needs to make a FAIR & REASONABLE offer to remaining holders. In Boustead's case, the initial 90c offer was raised to S$1.18 BUT the early acceptances did NOT benefit from the final raised offer.

1 month ago

So worst case scenario is $28.80

1 month ago

$28.88

1 month ago

@Dompeilee
Good that SGX has such a rule
Probably it's only a matter of time that the great Eastern shares will all be sold to OCBC.

Let's wait patiently!

1 month ago

If can be sold at a higher price @zhlim
Would even be better!!!

1 month ago

zildjian

mana tau announce special dividen after deal

1 month ago

I also vested as i have some geh shares

1 month ago

But this saga may drag longer than expected.

1 month ago

We not sure whether ocbc will give that fair and reasonable price on delisting day. If no have, means share suspension

1 month ago

Then 6 month later relist back again

1 month ago

SGX rule very very strict!
Fair n transparent!
They act fast too

1 month ago

Presently, and mindful of the 10% free-float rule, investors in GEH are concerned that the purchase price on June 19 is at a significant discount to GEH’s embedded value of $37.81 per share in FY2022. This, in turn is 2% lower than FY2021’s $38.57.

Embedded value is the sum of the value of In-Force Business and the value of the adjusted Shareholders’ Funds. The value of the In-Force Business is calculated using cash flow assumptions for future operating experience and are discounted at a risk-adjusted discount rate. The value of the In-Force Business varies from traditional DCF methods to arrive at an NPV because the risk-adjusted discount rate and allowance for the cost of holding statutory reserves for risk are approximates.

The economic value of one year’s new business rose by 7.1% y-o-y in FY2022 to $860.4 million. However, shareholders’ equity fell by 6% to $9,431.4 million.

The closer OCBC’s stake gets to 90%, the stronger the likelihood of compulsory acquisition by OCBC

1 month ago

Many rich are similar to OCBC. They have billions but scrimp & save pennies:

https://www.straitstimes.com/world/europe/members-of-britains-richest-family-get-jail-terms-for-exploiting-indian-staff-at-switzerland-mansion

1 month ago

Firstly, even after fair and reasonable, it also have to meet threshold of 75% valid acceptance. Then for compulsory acquisition, is 90% of independent shareholder.

1 month ago

https://www.theedgesingapore.com/news/ma/great-easterns-free-float-falls-below-10-it-may-need-restore-free-float

Latest news

4 weeks ago

INGAPORE - Minority shareholders of Great Eastern (GE) who are holding out for a better exit offer from OCBC Bank may be in for a long wait. How long?

Twenty years or so, if history is anything to go by.

3 weeks ago

Does the yearly dividend from Great Eastern justifies the holding out for a better offer?

3 weeks ago

As i said, this will be a very long fight

3 weeks ago

Oversea-Chinese Banking Corporation (OCBC) has issued a response to the letter sent by the Securities Investors Association Singapore (SIAS) on June 21.

In its letter, SIAS posed six questions pertaining to OCBC’s decision to stick to its original offer price of $25.60 per Great Eastern (GEH) share, key factors that led to the offer price, and more.

In its response dated June 27, OCBC explains that it already considered the “methodology, analysis and opinion” of its independent financial adviser (IFA), EY, before making the offer.

“We note the IFA, following the detailed analysis it has undertaken, had considered the traded multiples of comparable companies across various metrics, versus the multiples implied by our offer,” said the bank, adding that its offer price represented a 36.9% premium to GEH’s last-traded price the day before its privatisation announcement on May 10.

The letter, dated June 27, comes after GEH’s free float fell below the regulatory 10% on June 24.

“We further note that the IFA has opined that the offer is not fair but reasonable and has advised the independent GEH directors to recommend that GEH shareholders accept our offer and the independent GEH directors have concurred with the IFA’s recommendation,” continues the release.

3 weeks ago

Thank you Diamond7 for sharing.

3 weeks ago

Currently kuchai has not swapped it's shares with SBagan

Kuchai is still holding the GE shares
Can kuchai sell the shares to OCBC?

3 weeks ago

Looks like by the time the deadline for the exchange arrives, Great Eastern would already be swallowed by OCBC & the original agreement has to be significantly amended to reflect the much enlarged cash pile & the corresponding reduction in the equity asset column.

3 weeks ago

@Dompeilee you mean the transaction between sbagan and kuchai will most likely go through?

3 weeks ago

Don't think Sg Bagan will allow OCBC to buy over GE shares from Kuchai. Already 90%+ of Kuchai's shareholders voted in favour of the resolution so there is no turning back unless there is another resolution to overrule the earlier resolution. I think OCBC needs to negotiate with Sg Bagan and not Kuchai. As it stands, Sg Bagan got the upper hand and not Kuchai. Just my opinion.

3 weeks ago

But the proposed acquisition approved by resolution has not gone through at least till Oct 26th at the earliest while Kuchai is still in Great Eastern's register as the owner of 3,032,000 of its shares so how can OCBC be buying from SBagan more than its own 1.73 mil shares?

3 weeks ago

Very interesting development. Don't know how it's going to end up. Hope a win-win for both Kuchai and Sg Bagan shareholders.

3 weeks ago

There must be a good reason why they pushed it so far forward to 29 Oct when the closing date to accept the OCBC offer is 12 July. Is there a hidden message? Read between the lines.

3 weeks ago

@lionel messi what is the hidden line?

3 weeks ago

You mean they will talk behind scene until 29 oct?

3 weeks ago

I think they will just let 12 Jul lapse. Drag on so that they will get more time to get a better offer from OCBC.

2 weeks ago

The major minorities shareholders of GE is fighting for a higher price from OCBC.

2 weeks ago

Seen the latest announcement?

1 week ago

Oversea-Chinese Banking Corporation’s offer for Great Eastern Holdings G07 0.00% closed at 5.30pm on July 12. OCBC now holds 93.52% of GEH. On June 25, OCBC’s ownership crossed 90%. As a result, GEH shares will be suspended on Monday July 15.

Accordingly, the offer is no longer open for acceptance and any acceptances received after 5.30 p.m. (Singapore time) on 12 July 2024 will be rejected. However, shareholders who have not accepted the offer can still require the offeror to acquire their shares at the offer price pursuant to Section 215(3) of the Companies Act.

This says the transferee or offeror must, within one month from the date of the transfer, give notice to holders of the remaining shares that haven’t been tendered, that they can still tender their shares, and OCBC will have to accept them

1 week ago

The date of transfer refers to the date on which OCBC’s shareholding crossed 90%, on June 25. On July 24, OCBC will likely be announcing that GEH shareholers can still accept the offer at $25.60 per share and this offer will be open for three months from July 24.

OCBC group CEO Helen Wong unveiled a One Group strategy last year. GEH is likely to be part of that strategy. Interestingly, analysts have pointed out that OCBC doesn't charge GEH any bancassurance fees as these are not indicated in its annual report. In 2019, United Overseas Bank U11 0.03% and Prudential renewed a bancassurance agreement for 15 years for $1.5 billion over the course of the 15 years.

1 week ago

How will this exercise going to affect Kuchai and Sg Bagan's shareholders?

1 week ago

GEH to be suspended on July 15 but OCBC will continue to accept GEH shares for further three months...

1 week ago

So this is actually very beneficial to Sg Bagan as Sg Bagan already executed the resolution.

1 week ago

My guess is...

SBagan will sell the Great Eastern shares to OCBC within the 3 months after acquisition from Kuchai.

Deal with kuchai is still on going. Takes some time!

1 week ago

50-50

All not sure if the great Eastern shares will be sold to OCBC or not!

1 week ago

The notice did not mention the ex-date for taking over the assets and liabilities of Kuchai. Even if Sg Bagan doesn't sell the GEH shares to OCBC, it's still a valuable shares to hold. For long term, I think Sg Bagan's share should fly.🤞

1 week ago

And kluang will fly together

1 week ago

Or maybe have takeover of sg bagan asset by kluang

1 week ago

Lessons from OCBC’s offer for Great Eastern: be unafraid to hold out, but do so with eyes open
Earn dividends from shares that are suspended from trading and wait for a richer future offer

Leslie Yee
Leslie Yee
Published Tue, Jul 16, 2024 ·

5 days ago