Great Eastern to Resume Trading as Delisting Bid Fails
About 63.5% of the insurer's minority shareholders voted for a delisting but that fell short of the threshold needed to take Great Eastern private, according to a company filing on Tuesday after an extraordinary general meeting. As a result, OCBC's S$900 million ($704 million) offer has lapsed, the country's second-largest lender, said in a separate filing.
The deal's failure is a setback for OCBC, which has owned the majority of Great Eastern since 2004 and has tried multiple times to take the 117-year-old insurer private. OCBC Chief Executive Officer Helen Wong has said that it wanted to fully integrate its banking, wealth management and insurance businesses, and that owning all of Great Eastern would help improve its shareholder returns.
To support Great Eastern's delisting proposal, OCBC had offered S$30.15 a share for the 6.28% of the insurer it does not own. It improved the offer by 17.8% last month from its previous bid.
Great Eastern, one of the largest insurers in Singapore and Malaysia, has total assets of more than S$100 billion with 16 million-plus policyholders. OCBC's shares closed up 0.8% on Tuesday, versus a 0.4% gain in the broader Straits Times Index.
'Whether OCBC owns 94% or 100%, it has a minimal impact on earnings or strategy as they are already in control,' said Jayden Vantarakis, head of equity research for Southeast Asia at Macquarie Capital, adding that the market's view of the lender won't change with the latest outcome.
Trading in Great Eastern had been suspended since July 2024, after OCBC failed to obtain a sufficient level for a delisting or compulsory acquisition with its previous offer. Its latest bid this year was still lower than the insurer's 2024 embedded value of S$38.08 a share, a metric used to value insurers elsewhere and cited by resistant minority shareholders urging a higher offer.
Great Eastern will issue new shares to meet the exchange's listing rules. After the share issue, OCBC's holding in Great Eastern will be around 88% from the current level of about 94%, the insurer said in an earlier statement. It did not provide any date for the resumption of trading.
The insurer has contributed an average of about S$700 million a year in net profit to OCBC over the past 10 years, translating to an average of about 15% of OCBC's annual profit over this period, the bank has said.
(Corrects currency in fourth paragraph.)
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