CapitaMalls Asia

[specuvestor]

Let's look at CK Tang which was actually a pretty unique case.

When major shareholders reach 90% of o/s shares, they have the RIGHT ie call option to commence compulsory acquisition. However for some strange reason CK Tang did not exercise that right but choose to hold AGMs and lim kopi every year with their old shareholders.

http://www.valuebuddies.com/thread-1057-...l#pid61412

There is no strange reason for CK Tang case. If you all remember, they used a partnership vehicle, Tang Unity TWO LLP (if I remember correctly) to acquire CK Tang shares. Compulsory acquisition rule under Companies Act does not apply in this case since they are not using a company to acquire CK Tang shares. Therefore, they cannot compulsory acquire all the remaining shares out there from non-accepting shareholders.

Similarly, if I use my personal name to make an offer for a company for all its outstanding shares out there, Companies Act does not apply for me and therefore compulsory acquisition rule does not apply even if I hold 90% of the shares at the close of the offer.

Hope that the above clarifies.

Understand that's the official reason. So the simple question is why don't they use a company vehicle to take over? I would hardly think it is a slip. See how other GO is done by using new entity. Similarly Tang UnityThree LLP is a "new" entity. UIC is not using a 3rd party vehicle to GO SL because they were trying to catch Silchester on the SGX free float rule, not Companies Act.

Thanks for clarifying and please correct me if I am mistaken.

BTW I am not expressing any opinion on CMA, just a comment on the technicality since it was brought up and discussed

Actually, compulsory acquisition works both way. The offeror can exercise the right to compulsory acquire minority shareholders shares when the offeror hold more than 90%. However, minority shareholders can exercise their rights to require the offeror to acquire their share at the offer price what that happen.

Good point but I can't remember this technicality exist in Singapore or elsewhere but my friend tells me Caymen rules are different due to different Companies Act. So we do have to be careful of the domicile of the takeover vehicle, or even the listed entity.