However, when Musk turned Judas over Trump’s Triple B Bill, posting allegations on X, Trump reciprocated on Truth Social with threats and insults. The resulting carnage looked like a Bloody Mary for the Republicans’ mid-terms.
The real Bad Romance that may be unravelling, however, is embedded in section 899 of the Triple B bill, making its way to Congress. There on top of the tariff turbulence — even if Trump has been accused of being a Taco (Trump Always Chickens Out) in negotiation — is a provision that may hit US$60 trillion ($77 trillion) of foreign investment in the US in 5% to 20% of exit taxes on capital for countries deemed offensive to the US in their domestic policies. These would include allies like Europe and Australia, including their pensions and sovereign wealth funds, potentially, and anyone, really.
These “revenge” taxes could even hit remittances, de facto functioning as some kind of capital control, even whilst asking for global manufacturing to relocate to the US! It may be the ultimate Killah on the co-dependence of allies providing capital and investing in the US, believing in the US dollar and US Treasuries (IOU’s). One only hopes in the decline and fall that is showing gradually in yield and dollar depreciation that if and when it eventually happens, the US economic Beast will Die with A Smile.
Garden of Eden
As global inflation bites, coupled with Trump tariff uncertainty, discretionary consumption in many countries has struggled somewhat. This is not dissimilar in Singapore, where our strong dollar sent more holidaymakers to Malaysia and Japan, but led to more F&B closures, and not greedy landlords.
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True, cutting costs will help ease cash flow, but it is the top line that matters, as cutting costs per se will not help profits. Two listed F&B companies, Japan Foods and Tung Lok, reported full-year losses, but hopefully, tourist arrivals and spending linked to concerts such as Lady Gaga’s and conferences such as the Shangri-La Dialogue had in 2Q2025. And one has to remain hopeful for the 2H2025, and hope trade disruptions do not dampen appetites for domestic spending.
Still, as our Straits Times Index (STI) attempts to break 4,000 points again, it is a curious case where lamentations that the Disease of privatisations and delisting infect more within mid and small caps. Strategic reviews by Acrophyte Hospitality Trust; potential shareholders’ transactions in Grand Venture Technology; controlling shareholders’ buying in Ho Bee Landand unexplained pops in Hotel PropertiesLimited are all keeping the speculative appetite whet.
My contrarian view is this: the long-suffering shareholders of these companies now have much cause for celebration, as their undiscovered gems are now shining brightly. If the public market does not value these companies as well as their sponsor or the private markets, then it is simply capitalism. Regulators have to find the best of a tough mechanism to ensure fair exit offers for investors and rely on professionals to opine.
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Staying home — where Chew On This has been one of this market’s biggest advocates — has been rewarding from many a market revaluation and not just buyout offers, or “jackpots” - for which we have almost had 20 thus far this year. It is not just our local banks with nearly half the STI’s weight that drove much unheralded outperformance versus many large global markets. Year to date, ST Engineering is up 70%, Singtel 27% and Sembcorp Industries24% — all favourites of this column since inception as non-bank potential outperformers last year.
I wish I could listen to myself more often but instead banked a small proportion of these moves early and recycling them to other opportunities of the day. Some stocks outside the big caps have also been beneficiaries of offers speculated last year. For instance, Fraser’s Hospitality Trust for a not-too-shabby 20% to 50% return, depending on when investors joined the party.
Other buds have bloomed, albeit with a smaller but not paltry potential payout, such as Great Eastern Holdings’ revised offer by OCBC, which is over 17% higher than last year’s offer before the stock was suspended.
How Bad Do You Want Me?
The wait for this revised offer took 11 months, perhaps because the boards really had to review many multiple permutations and consider a wide variety of stakeholders, including what would be the clearing price for two long-time family groups and at least one activist international investor to accept.
The lengthy wait was presumably because regulators, including the Securities Industry Council, had to consider if this was indeed a fair and reasonable one, as the independent financial adviser had already opined, but probably if the “cleverness” of the structure of the offer met the requirements. A very clever game of poker has now resulted.
First, of course, Paparazzi and local activists who had been campaigning for a higher offer and commentators, including SIAS, had expressed righteous indignation over how OCBC had indeed made a higher offer for the residual 6.28% of holdouts who refused to accept last year’s original $25.60 offer. They were bemoaning that Great Eastern shareholders who could not bear with uncertainty of a potential loss of liquidity from a long market suspension and therefore forced to accept a lower offer, and now, lo and behold, a nicer offer of $30.15 has been put on the table less than a year out.
However, OCBC’s thousands of shareholders vastly outnumber the mere hundreds owning Great Eastern — including myself. The former group probably prefers OCBC to delist Great Eastern for a lower cost.
It is inevitable in a capital market that everyone, from their vantage point, would want to maximise their returns. And all sellers always want higher prices. I would, as an investor still holding on to my Great Eastern shares, vastly prefer a $38 exit offer price, which is closer to its new business embedded value. But the market was valuing it far lower. If the new conditional offer fails to garner the support of 75% of the holdouts and the market price discovery fell back below the pre offer price lower than $20 (unadjusted for the proposed bonus shares), I may get 85 cents return in dividends for a paltry 4% carry for an illiquid stock.
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The offers and choices are made available to all and are equitable to all shareholders who have to choose accordingly. One cannot have chosen last year and then demand that the offeror give more today, having accepted last year, whatever the hardship. It is unfortunate, but in many aspects of life, we do not get to have our cake and eat it.
Whether we agree with the IFA on the fairness of the new offer, they have to stand by their professional judgement and reputation, which all of us will have a view or bias on. Likewise, regulators should not be arbiters of what is a fair and reasonable price in the market and have to rely on the IFA similarly. If they do and we compel an offeror to have to pay, say, NAV or NBEV or whatever metric gets carved in the rules, who is to say this is the right metric at a future point in time? Paying NAV may be what minorities of Sinarmas Landmay want, but maybe that is not enough if an NAV is stale or a company takes a conservative approach of keeping the purchase price on books like City Developments, or may be overstated, resulting in no offer?
It is important to protect investors, but just a one-dimensional view per se fails to recognise the fact that a marketplace also includes issuers. If regulators require issuers, major shareholders to guarantee certain metrics of prices, then we may not have any listed companies after all, as the market is asymmetrically tilted against them.
What may be left without activist investors willing to come to take a risk will be lots of Zombieboys orphan stocks, with no investor interest and no takeouts. There are activist investors who try to get boards and management to create value or force buyouts by taking their professional risks. In many global M&A deals, there are wars not only in dollars and cents but also in strategy, and it is a game between the offeror and them.
Poker Face
The poker game placed before us shareholders is very clever. Instead of restoring free float by placements, which is a typical route for an issuer to restore free float to less than 90% held by controlling shareholders, we have been presented with Hobson’s choice. A conditional fairer exit offer (in my opinion, that can be better) that optically just crosses the $30 handle, or an at least five-year wait through a creative corporate action of a one-to-one bonus issue and voluntary five-year moratorium of Class B non-voting shares.
It may be a five-year wait before OCBC converts its Class B shares and once again has to make another offer, given its stated goal of delisting Great Eastern. A five-year wait with low liquidity and uncertainty is not a great use of capital. For those who accepted the offer last year and used the proceeds to buy OCBC shares, they would have had a higher return than waiting for this extra 17% presented now.
In five years, if there are other revaluations of buyout gems waiting to be discovered, the opportunity cost of waiting for a more respectable offer may be too high. I held out last year, and I am ok with a 17% return in a year or so. It may be Shallower than what I hope for, but I will reluctantly vote yes to accept this conditional bird in hand, and hopefully, Great Eastern will Vanish into You (OCBC) soon for me to recycle my capital.
Chew Sutat retired from the Singapore Exchangeafter 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi-asset exchange. He was awarded FOW’s Lifetime Achievement Award. He serves as chairman of the Community Chest Singapore
