Source of article: Business Times

Writer credits: Uma Devi

The Singapore market has seen a number of delisting and privatisation offers in recent months. Retail investors are increasingly more sophisticated and better informed compared to the days of yore. Investors compare, inter alia, the offer price to the price of the securities at the time of the entity’s IPO, its current net asset value per share based on recent professional valuation, and the envisaged prospects of the entity’s industry, before deciding whether to accept the offer. Offerors that “low-ball” the offer price risk having an adverse recommendation from the independent financial adviser as not fair and not reasonable, and possibly, a failed bid.

Poor liquidity and low valuations of the Singapore market is primarily the reason why controlling shareholders who are in management decide to take a listed company private. The high costs of complying with an increasingly stricter regulatory regime vis-a-vis the perceived lower benefits of maintaining a listed entity in an illiquid and depressed market has certainly contributed to the recent surge of delistings and privatisations in Singapore.

I shared my views with the Singapore Business Times in the attached front-page story published on 19 September 2022.

My post on LinkedIn is here.