Yahoo Finance OCBC makes privatisation bid for Great Eastern with $25.60 offer price
OCBC has announced a $1.4 billion voluntary unconditional general offer for the 11.56% stake in GEH it does not currently own.
Oversea-Chinese Banking Corporation Limited (OCBC) O39 has announced a $1.4 billion voluntary unconditional general offer for the 11.56% stake in Great Eastern Holdings G07 G07 (GEH) that it does not currently own.
According to a May 10 statement, this will strengthen OCBC’s business pillars of banking, wealth management and insurance, and optimise its capital to enhance shareholder returns.
The offer price of $25.60 represents a 36.9% premium over GEH’s last traded price of $18.70 and premiums of 38.6%, 40.0% and 42.4% over the one-month, three-month and 12-month periods up to and including the last trading date of May 9.
With the offer, OCBC intends to increase its investment in GEH beyond its current stake of 88.44%, with a view to delisting the insurer from the Singapore Exchange S68 S68.
The announcement accompanied OCBC's results for 1QFY2024 ended March 31. The bank reported net profit of $1.98 billion for the quarter, 22% higher q-o-q and 5% higher y-o-y.
Shareholders have long called for OCBC to privatise the separately-listed GEH. In June 2023, OCBC bought 2.3 million GEH shares for nearly $40 million, which took its stake up from 87.9% to its current 88.4%.
At OCBC's AGM on April 30, the bank’s chairman Andrew Lee did not give a clear indication of OCBC's plans, saying: “Since 2006, the free float of Great Eastern is lesser than 20%. OCBC is not in the business of providing liquidity for another company. We have our own strategic agendas… We have no direct interest in stimulating Great Eastern liquidity or share price.”
OCBC group CEO Helen Wong says the offer is a “natural progression” of OCBC’s strategy. “We have moved intentionally to build up a strong wealth management franchise by hiring the best people and instituting best practices and processes, and raising our investment in Great Eastern.”
She adds: “We have been looking at opportunities to best use our capital and believe the offer allows us to deploy our resources into a key business that is expected to be earnings accretive to OCBC.”
Great Eastern Holdings has requested for a trading halt as of 7.19am on May 10. Shares in OCBC closed 16 cents higher, or 1.16% up, at $13.91 on May 9.
See Also:
Click here to stay updated with the Latest Business & Investment News in Singapore
OCBC 1QFY2024 net profit up 22% q-o-q, 5% y-o-y to $1.98 bil
Stable Asia dollar and Singdollar credit markets despite rates staying higher for longer
DBS remains as Singapore’s most valuable brand, while MBS becomes strongest brand in 2024
Get in-depth insights from our expert contributors, and dive into financial and economic trends
