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The Listed Companies in Singapore That Could Be Privatised

In the years since the Global Financial Crisis, there have been multiple privatization deals in Singapore’s stock market involving companies with market capitalisations of over a billion dollars. This has caused some well-known companies to be removed from the hands of public investors.

The following is a list of some of the billion-dollar companies in Singapore’s market that have been privatised since 2009:

  • Goodpack
  • Cerebos Pacific
  • Asia Pacific Breweries
  • Keppel Land CapitaMalls Asia
  • Neptune Orient Lines
  • Tiger Airways Holdings OSIM International

Right now, there are a number of companies in Singapore’s market that could possibly be taken private. Here are some I found interesting.

Management buyouts

The trio of ARA Asset Management Limited (SGX: D1R)Auric Pacific Group Limited (SGX: A23) and Spindex Industries Ltd (SGX: 564) have very different businesses, but they are all share a similar thread: They’ve received buyout offers from their management teams and their related parties.

Auric Pacific is perhaps best known as the baker behind the Sunshine Bread brand and as the operator of the Food Junction food courts and Delifrance Cafés in Singapore. The deal to takeover the company – a voluntary conditional cash offer – comes from its executive directors and major shareholders, Dr Stephen Riady and Dr Andy Adhiwana.

ARA Asset Management’s chief executive, John Lim, has offered a price of S$1.78 per share for the remaining shares of the company that him and his related parties do not yet own. Lim’s offer is a scheme of arrangement, which requires court approval and a vote by shareholders that are not part of Lim’s consortium. The company will hold the scheme-meeting by 31 March 2017.

As for Spindex, the company’s chairman, Tan Choo Pie @ Tan Chang Chai, and his family, have offered to buy over the company’s remaining shares for S$0.85 each. Tan and his family, who currently control 25.2% of Spindex’s shares, have also opted to utilise a scheme of arrangement.

Third-party buyout

Other companies such as Super Group Ltd (SGX: S10) and Healthway Medical Corp Ltd (SGX: 5NG) have attracted the attention of  third parties that are not part of the management team.

In late 2016, Jacobs Douwe Egberts BV (JDE) offered to privatise Super Group at a price of S$1.30 per share. Super Group has been struggling to turnaround its business over the past few years. But, it seems that JDE sees value in Super Group and obviously wants the whole business for itself. Super Group was recommended by one of our stock recommendation services, Stock Advisor Gold, back in June 2016.

Super Group’s offer is conditional upon a few items, one of which is the receipt of regulatory approvals from authorities in China, the Philippines, and Singapore.

Healthway Medical could also be heading for a privatisation after a troubled year. Some of the company’s largest passive shareholders, including Lippo China Resources and Lippo Capital, have offered to pay S$0.042 in cash for the remaining shares of Healthway Medical that they do not control. Both Lippo China Resources and Lippo Capital are part of the Indonesia-based Lippo Group, which is managed by the Riady family.

Foolish Summary

Many more companies are in the mix for a possible privatisation. Some investors are cheering the sudden windfall while others are commenting that some of the buyouts are short-changing minority investors. It would be interesting to see how all the buyouts change the landscape of the stock market in Singapore.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim owns shares in Super Group and ARA Asset Management.