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CNA
11-07-2025
- Business
- CNA
Commentary: Did anyone really win the Great Eastern-OCBC standoff?
SINGAPORE: At Great Eastern's extraordinary general meeting on Tuesday (Jul 8), around 63.5 per cent of the insurer's minority shareholders said yes to delisting. But this did not meet the 75 per cent approval required to go ahead with the proposal. As a result, the proposed S$30.15 exit offer from majority shareholder OCBC – which was conditional on the delisting resolution being passed – lapsed. This was celebrated by dissenting shareholders as a win for minority rights. At the same time, others picked OCBC, the Singapore Exchange (SGX) as well as Mr Wong Hong Sun and his family - who collectively hold more than a quarter of Great Eastern minority shares that voted this week – as 'winners' in the year-long saga. Mr Wong – whose grandfather chaired Great Eastern for nearly 20 years – has been outspoken about his decision not to sell, citing both sentimental ties and valuation concerns. If everyone is the winner, who is the loser? Two groups of minority shareholders are now left exposed: those who declined OCBC's voluntary general offer last year of S$25.60 per share, and those who supported the more recent S$30.15 offer but were blocked by a small group of holdouts. A SMALL YET POWERFUL GROUP As Great Eastern's filing with the SGX shows, shareholders owning 23.7 million shares voted in person or by proxy. Of those, 15.02 million shares, or 63.49 per cent, voted to delist. But the Wong clan representing 7.56 million shares voted against. Their collective stake accounts for 87.5 per cent of the 8.64 million shares that torpedoed the delisting. In short, despite being the majority of the minorities, shareholders owning the 63.5 per cent voting shares failed to push through the resolution. Following the failed move to delist, Great Eastern shares will likely resume trading. But this share trading can only resume if Great Eastern restores the minimum 10 per cent free float required under SGX's rules. And this in turn depends on whether Great Eastern can carry out its plan to dilute OCBC's stake from 93.7 per cent to below 90 per cent. To effect this dilution, Great Eastern will have to declare a 1-for-1 bonus issue of ordinary and Class C non-voting shares. OCBC has agreed to support this so-called 'Pathway 2' to resolve the suspension impasse by agreeing to take up the non-voting shares. It will not, however, lose its 93.7 per cent rights to any economic benefits offered to ordinary shareholders, such as dividends. The default election for minority shareholders is ordinary voting shares, but they too have a right to accept the bonus shares in the form of the Class C non-voting scrip. From the questions asked during the extraordinary general meeting, it seemed like some shareholders disagreed with the advice of Great Eastern's independent directors and independent financial adviser. One of the shareholders told the Board that had they earlier taken the independent directors' advice, they wouldn't have gotten the higher S$30.15 exit offer. THE RIGHT PRICE This brings us to the next bizarre aspect of this saga. Having torpedoed Pathway 1 (the delisting), minority shareholders holding the combined 36.5 per cent stake surely intend to extract another exit offer, higher than the S$30.15 that they had rejected. Mr Wong was quoted in the press as saying that Great Eastern is his 'grandfather's company … I would not sell it'. What he probably meant was 'it's my grandfather's company, I won't sell at this price.' After all, when probed if the family might sell if the offer price was higher, he said: 'We might.' That is perfectly fair and fine: Every shareholder must seek the best price. But Pathway 2 is also fraught with problems for these dissenting minorities. If most minorities accept ordinary shares, Great Eastern will get to resume trading. However, when trading resumes, Great Eastern's shares will likely go south – below the pre-takeover price of S$18.70 – going by past trends. All minorities will end up worse off than before the takeover bid was launched in May 2024. UK activist fund Palliser, which reportedly bought into the counter at above S$25, will likely book millions of dollars in paper losses. So, it would be in the interest of dissenting shareholders to also scupper the lifting of trading suspension by electing for Class C non-voting shares. Mathematically, they would need the help of another 1.1 million shares to keep the counter in limbo – not delisted but still suspended. WHAT'S THE LIKELIHOOD OF ANOTHER OFFER? Can the dissenting minorities force the parties to make another exit offer? OCBC has stated clearly that it 'will not make another offer for Great Eastern in the foreseeable future'. Why should it? From OCBC's perspective, it can mop up Great Eastern shares if trading resumes at a discounted price. The bank is the master of the long game. Lest anyone forgets, it has been accumulating Great Eastern shares for the last 30 years. If lifting of the suspension is thwarted, the ball will be in the SGX's court to figure out a solution. Can the SGX compel a 'round 2': invite another, perhaps higher, exit offer? Or will it let the market decide on the price of an exit that is the result of willing buyer-willing seller arm's length negotiations between a major shareholder and minority shareholders who want out? There is no precedent, and we could be sailing into uncharted territory. What happened at the extraordinary general meeting is not a situation of the minorities having a voice. It is not a tyranny of the majority. The cynic might even call it tyranny of the 'minority of minorities'. The wishes of two-thirds who wanted to exit at S$30.15 was thwarted by the one-third who hope that the regulator can force OCBC/Great Eastern to come up with a higher exit offer. Finally, all this also raises the question of whether the SGX should rethink its 75 per cent rule to delist a company at the exit offer stage? If nothing else, the Great Eastern situation has laid bare the reality that shareholders controlling one-third of 6 per cent of a company can have the last word on a matter of such importance to all shareholders. Would not a simple majority of, say 50 per cent, be fairer?
AsiaOne
09-07-2025
- Business
- AsiaOne
'It's our grandfather's company, we won't sell', says Wong family as shareholders reject GE delisting bid, Money News
SINGAPORE — Great Eastern (GE) may resume trading after a proposed delisting resolution failed to pass at its extraordinary general meeting (EGM) on Tuesday (July 8). At the meeting held at Great Eastern Centre, around 63.5 per cent of minority shareholders present and voting at the EGM voted in favour of the delisting resolution, falling short of the minimum 75 per cent required for the delisting to take place. GE had said in a June 9 circular to shareholders that the delisting would need the approval of a majority of at least 75 per cent of the total number of shares held by minority shareholders present and voting in person or by proxy at the EGM. OCBC Bank, the parent company of GE, abstained from voting. The outcome of the delisting resolution was determined solely by GE's minority shareholders. Had they voted to delist, they would have been able to receive $30.15 per share under OCBC's $900 million exit offer for the remaining 6.28 per cent of GE shares it does not own. This is up from the original $25.60 per share offer in May 2024. The $30.15 exit offer was assessed as fair and reasonable by Ernst & Young, the independent financial adviser (IFA) appointed by GE. According to Singapore Exchange listing rules, an offer must be both fair and reasonable before a company can delist. Mr Wong Hong Sun and his family, who own 7.56 million shares, representing 25.5 per cent of 29.6 million shares held in total by minority shareholders, voted against the delisting. "This is my grandfather's company and it's our legacy. I would not sell it. We are holding for the legacy for our son," said Mr Wong, whose grandfather Wong Siew Qui was chairman of Great Eastern Life Assurance Co from 1951 to 1969. He noted that the offer price of $30.15 is at the lower end of the IFA's fair and reasonable range of $30.10 to $37.63. He said: "We don't need the money, so why should we sell at a low price? I told them (OCBC) it must be at a premium to the embedded value. There is no such thing as a discount." The embedded value for GE is $38.08 per share as at end-2024. Asked if he would sell if the offer price was higher, Mr Wong said: "We might." His wife Wong-Tan Kar Yean added: "Since the first quarter of 2025, Great Eastern has performed very, very well. You must give us the right price. You cannot oppress the minorities." After the delisting resolution failed to pass, GE's chairman Soon Tit Koon declared that the delisting will not proceed, and the company will remain listed on the SGX. He added that the conditional exit offering made by OCBC will also lapse. Shareholders were then asked to vote for the resumption of trading resolution, which necessitates the adoption of a new Constitution to create Class C non-voting shares and undertaking of the proposed bonus issue. More than 98 per cent voted for the adoption of the new Constitution and the bonus issue resolution, surpassing the minimum 75 per cent required for the resolution to pass. Under the resumption of trading resolution, GE will undertake a proposed bonus issue where shareholders will get bonus ordinary shares in respect of their shares unless they elect to receive Class C non-voting shares. Class C non-voting shares in GE still carry full economic rights, including dividends — but no voting power. Unlike ordinary shares, they will not count towards restoring the free float. One elderly shareholder, who declined to be named, was among those who voted for the delisting. He said: "I voted against the initial $25.60 offer because it was unfair and gave us expectations of a better offer later. But I thought the $30.15 offer this time was acceptable. "Now, I will just have to wait and see how I can cash out of my shareholdings at a good price." Still, should GE shares resume trading, they will be far more illiquid than before the offer, and there is a chance the share price may fall. GE shares last traded at $18.70 before OCBC's previous offer. Some shareholders said they will be choosing ordinary shares and waiting for trading to resume. They also said that they expect dividends to rise given that GE has been performing better. GE in February reported that profit attributable to shareholders for 2024 grew by 28 per cent year on year to $995.3 million. OCBC said it intends to receive the Class C non-voting shares, which will dilute its own shareholding of voting shares in GE to 88.19 per cent. This will help to restore GE's minimum free float of 10 per cent and allow trading to resume. OCBC will still retain its rights to 93.72 per cent of the economic interests in GE, as the Class C shares rank equally with all ordinary shares in respect of dividends and distributions. But there could be a stumbling block to the resumption of trading in the shares due to the provision that minority shareholders can elect to get bonus ordinary shares or Class C non-voting shares. Some minority shareholders said in the event that a sufficient number of shareholders choose Class C shares, there is a chance that GE may not be able to restore its free float and its trading will remain suspended. If minority shareholders owning more than 9.8 million shares elect Class C non-voting shares, OCBC's stake will not be diluted below 90 per cent and trading will not resume. OCBC had previously said it does not intend to revise the exit offer price. These developments come after the previous offer by OCBC was deemed "not fair but reasonable". OCBC had launched in May 2024 a $1.4 billion bid to privatise GE by acquiring the remaining 11.56 per cent stake it did not own at $25.60 per share. However, the bank's accumulated stake by the end of the offer in July 2024, at 93.7 per cent, was insufficient for it to compulsorily acquire the rest of GE's shares. Some minority shareholders refused to accept the $25.60 per share offer, saying it undervalued the company. Great Eastern lost its required 10 per cent minimum free float, resulting in the trading suspension of the insurer's shares. In response to ST's queries on the outcome, OCBC said the objectives are to capture benefits from further operational synergies with GE and a higher share of its value. "These objectives have been met with the increase in OCBC's investment in Great Eastern Holdings to 93.72 per cent in October 2024, successfully concluding the voluntary general offer," an OCBC spokesperson said. "Regardless of the outcome of the EGM, we would be satisfied with this level of economic interest. Class C non-voting shares are entitled to dividends and other distributions, and will be earnings accretive to OCBC." If all the conditions are met, the date of the resumption of trading of GE's shares will be announced at a later time. OCBC shares closed 0.84 per cent higher at $16.71 on July 8. [[nid:719194]] This article was first published in The Straits Times . Permission required for reproduction.
New Straits Times
06-06-2025
- Business
- New Straits Times
Singapore's Great Eastern proposes delisting with OCBC's US$700mil offer
KUALA LUMPUR: Great Eastern is proposing to delist from the Singapore bourse by way of its largest shareholder Oversea-Chinese Banking Corp offering S$900 million (US$699.9 million) to buy the rest of the insurer it does not already own, according to joint statement and filings on Friday. Trading in Singapore-based Great Eastern's shares was suspended on July 15, 2024, after its free float fell below 10 per cent following an offer by OCBC to acquire an 11.56 per cent stake at S$25.60 apiece in May 2024. OCBC, Singapore's second-largest lender, had obtained acceptance from some shareholders and currently owns 93.72 per cent of Great Eastern. Under the new proposal, it is offering S$30.15 a share for the 6.28 per cent of the insurer's stock that it does not own. The latest offer is 17.8 per cent higher than last year's offer and values Great Eastern at S$14.27 billion. Independent financial adviser EY has assessed the offer is fair and reasonable and OCBC does not intend to revise it, according to the statement. It is OCBC's fourth attempt to fully acquire Great Eastern, following three bids since 2004. OCBC owns 93.72 per cent of the insurer, but that stake still falls short of the threshold needed to delist the company or launch a compulsory acquisition. Two companies controlled by Lee Thor Seng and his sons —members of the founding family behind OCBC — own nearly 2 per cent of Great Eastern, making them the second-largest shareholders, according to the insurer's annual report. Wong Hong Sun and Wong Hong Yen hold about 1 per cent, while Palliser Capital, which has criticised the latest takeover bid as unfair to shareholders, owns a 0.27 per cent stake, the report showed. Great Eastern proposed the delisting after assessing options available to resolve its shares trading suspension. The delisting offer is conditional upon at least 75 per cent backing from minority shareholders. OCBC will not be able to vote. If delisting cannot be achieved, Great Eastern would seek shareholders' approval on a second proposal to restore its free float by way of a one-for-one bonus issue comprising new listed shares with voting rights, and new non-listed shares without voting rights. According to the statement, OCBC intends to vote in favour of the bonus issue if the delisting proposal is not approved. OCBC would opt to receive the non-voting shares, which would dilute the bank's shareholding in Great Eastern to 88.19 per cent to help restore the free float and a resumption in trading.
CNA
06-06-2025
- Business
- CNA
OCBC offers US$700 million for remaining 6.28% of insurer Great Eastern
Oversea-Chinese Banking Corp is now offering S$900 million (US$699.9 million) to buy the chunk of insurer Great Eastern that it does not already own, almost a year after failing to gain full control of the firm. Under the conditional exit offer announced on Friday (Jun 6), OCBC is offering S$30.15 for the 6.28 per cent of the insurer's stock that it does not own. This values Great Eastern at S$14.27 billion and paves the way for the insurer to be taken private by its owner. In May 2024, OCBC offered S$25.60 apiece for the 11.56 per cent stake in Great Eastern. The new exit offer reflects a 17.8 per cent premium from the previous bid. The final offer from Singapore's second-largest bank would mark its fourth attempt to fully acquire Great Eastern, following three previous bids since 2004. OCBC owns 93.72 per cent of the insurer, but that stake still falls short of the threshold needed to delist the company or launch a compulsory acquisition. Two companies controlled by Lee Thor Seng and his sons - members of the founding family behind OCBC - own nearly 2 per cent of Great Eastern, making them the second-largest shareholders, according to the insurer's annual report. Wong Hong Sun and Wong Hong Yen hold about 1 per cent, while Palliser Capital, which previously criticised the latest takeover bid as unfair to shareholders, owns a 0.27 per cent stake, the report showed. Trading in Great Eastern's shares was suspended on Jul 15, 2024, after its free float fell below 10 per cent. OCBC currently has a 93.72 per cent stake in Great Eastern. The offer, to go through, requires a minimum 75 per cent backing from minority shareholders. If the delisting is not approved, shareholders would then be voting on a proposal to resume trading in the insurer's shares.
Straits Times
23-05-2025
- Business
- Straits Times
Great Eastern gets another extension to June 8 to announce plan to restore free float
Great Eastern has until Jun 8 to announce its finalised proposal to comply with listing rules, its bourse filing on May 23 indicated. PHOTO: ST FILE Great Eastern gets another extension to June 8 to announce plan to restore free float SINGAPORE - Great Eastern Holdings has been granted yet another extension of time to comply with free float requirements under the Singapore Exchange's (SGX) listing rules. The insurer now has until Jun 8 to announce its finalised proposal to comply with listing rules, its bourse filing on May 23 indicated. It was previously granted an extension in January 2025, and in October 2024. Great Eastern said it has been exploring various options to formulate a proposal to meet with the requirements which can address the interests of stakeholders, and has made 'significant progress in formulating a proposal'. It will issue an announcement to update shareholders on the finalised proposal 'shortly', no later than Jun 8, it added. Shares of Great Eastern have been suspended from trading since July 2024, after the counter lost its free float following a takeover bid by its majority shareholder OCBC. Last May, OCBC made a voluntary unconditional general offer of $1.4 billion for the remaining 11.56 per cent stake in Great Eastern that it did not already own, with the aim to delist the insurer. At the close of the offer in July 2024, the bank held 93.52 per cent of the insurer, falling short of the shareholding it needed to delist Great Eastern, or to compulsorily acquire the rest of the shares. In January, it was reported that OCBC's chief executive Helen Wong met with Mr Wong Hong Sun, his brother Hong Yen, as well as representatives of Mr Lee Thor Seng and his family, who are long-time shareholders of Great Eastern with a combined 3 per cent stake. The offer was deemed 'not fair but reasonable' by the independent financial adviser for the deal. THE BUSINESS TIMES Join ST's Telegram channel and get the latest breaking news delivered to you.
