Kyle Arnold Shaw, Jr is offering to privatise plant and terminal engineering specialist PEC by way of a scheme arrangement, according to a bourse filing on Feb 17.
Shaw is making the offer via an entity called Alliance Energy Services, in which he is the sole director. Alliance Energy Services is part of a group of engineering entities under the Liberty Group.
This privatisation deal joins a growing list of similar offers involving SGX-listed companies. This year alone, Paragon REIT, Japfa , SLB Development, and Econ Healthcare (Asia) are all in varying stages of privatisation attempts by their respective controlling shareholders.
Under terms of the offer, Shaw is offering 64 cents cash per share, and a second cash consideration of 20 cents per share by way of a special cash dividend per share to be declared out of the profits and retained earnings of PEC.
The joint announcement states that if any dividends, rights or other distributions are declared, paid or made by PEC to its shareholders on or after Feb 17, and before the date on which the scheme becomes effective in accordance with its terms, the offeror reserves the right to reduce the cash consideration by the amount of such distributions.
PEC's executive chairman Edna Ko and a group of shareholders have given their irrevocable undertaking to sell their combined stake of 63.38% to the offeror.
See also: Econ Healthcare receives privatisation offer of 33 cents per share
PEC listed on the Mainboard of the Singapore Exchange on Aug 7, 2009. It offers maintenance and turnaround services and modular process systems to the energy, petrochemical, oil and chemical terminals, and pharmaceutical industries in Asia and the Middle East.
According to the document, the acquisition presents an opportunity for eligible shareholders to unlock value and realise their investment in the shares at an attractive premium over historical market prices.
The scheme consideration represents a premium of approximately 23.5%, 28.6%, 30.6% and 33.3% over the volume weighted average price (VWAP) per share for the one, three, six and 12-month period respectively up until Nov 26, 2024.
See also: Japfa's controlling Santosa family makes 62 cents per share privatisation offer
The scheme consideration also represents a premium of 12.75% over the last transacted price per share of 74.5 cents on the last undistributed trading day.
In addition, the historical trading volume of the shares in PEC has been low, representing less than 0.12% of the total number of shares.
The scheme consideration therefore implies a total return of 64.1% for an eligible shareholder over a five-year holding period, according to the release.
Since PEC’s listing in 2009, it has not raised funds from the equity market and is unlikely to do so in the foreseeable future. Therefore, the listing status of the company brings fewer benefits than envisaged.
Oversea-Chinese Banking Corporation is PEC's financial adviser while SAC Capital is advising the offeror.
Shares in PEC Limited closed flat at 83 cents on Feb 17.
