Oversea-Chinese Banking Corporation Limited has announced, at the request of Great Eastern Holdings(GEH), it will support the latter's proposal to seek a delisting of GEH shares with a $0.9 billion conditional exit offer at $30.15 per share for the 6.28% GEH shares it does not own.
Trading in GEH shares was suspended on July 15 2024 after the insurer’s free float fell below 10%. GEH shareholders who have not been able to sell their shares for the past 11 months will now have an opportunity to do so via the exit offer. The independent financial adviser, Ernst and Young, has opined that the exit offer is fair and reasonable.
GEH is proposing a delisting after evaluating the options available and taking into account the practicalities and feasibility of each option. If delisting cannot be achieved, GEH will proceed to seek shareholders’ approval on a second proposal to restore the free float.
OCBC’s exit offer is conditional upon at least 75% of the total number of issued shares held by GEH shareholders voting in person or by proxy, in favour of a delisting resolution that GEH will table at an extraordinary general meeting (EGM) to be convened. OCBC will not be able to vote on the resolution.
If the delisting resolution is not passed, the exit offer will lapse. GEH will proceed to propose a resolution to satisfy the free float requirement.
The 1-for-1 bonus issue resolution comprises new ordinary shares (Bonus Shares), which will be listed and carry voting rights, and newly-created Class C Non-Voting Shares which will not be listed and have no voting rights.
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Both classes of shares will be issued at no consideration from shareholders, and will be entitled to the same dividends. OCBC will be able to vote on the bonus issue resolution.
All GEH shareholders will receive the Bonus Shares unless they elect to receive the Class C Non-Voting Shares.
OCBC intends to vote in favour of the bonus issue resolution and at the request of GEH, will opt to receive Class C Non-Voting Shares. By doing so, OCBC will dilute its own shareholding of voting shares in GEH to 88.19% and will help GEH to restore free float and allow trading to resume.
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This assumes that GEH minority shareholders, who hold the remnant 6.28% stake, receive the Bonus Shares by not opting for the Class C Non-Voting Shares. OCBC will retain its rights to 93.72% of the economic interests in GEH (including the rights to 93.72% of dividends to be paid) as the Class C Non-voting Shares rank equally with all ordinary GEH shares in respect of dividends and distributions.
OCBC said its exit offer price is final and it has no intention of launching another offer in the foreseeable future.
