BRC Asia offers 42 cents per share for all Lee Metal shares

BRC Asia offers 42 cents per share for all Lee Metal shares

Stanislaus Jude Chan
21/02/18, 04:27 pm

SINGAPORE (Feb 21): BRC Asia is making a voluntary conditional cash offer of 42 cents a share for all the issued shares in Lee Metal Group.

The offer price represents a 2.4% premium over Lee Metal’s last traded price of 41 cents on Tuesday.

It is also a 32.9% premium above the volume weighted average price (VWAP) for the 12-month period prior to Lee Metal’s last undisturbed trading day on Nov 10, 2017, when an announcement was made regarding a notification by certain shareholders of an unsolicited approach in relation to their shares.

According to the pre-conditional offer announcement, the transaction will first need to receive approval from the Competition Commission of Singapore that it does not infringe the prohibition under Section 54 of the Competition Act.

The voluntary cash offer will also be conditional on BRC Asia holding shares carrying more than 50% of the voting rights attributable to issued shares by the closing date.

BRC Asia has already received irrevocable undertakings from certain Lee Metal shareholders, including executive chairman and CEO Lee Lin Poey, to accept the offer if and when it is made. These undertakings total some 228 million shares of Lee Metal, accounting for 48.06% of the entire issued shares.

According to a filing to SGX on Wednesday, BRC Asia believes it will be well-positioned to capitalise on Lee Metal’s trading platform to expand its own service / product offerings as well as create potential synergies by combining with a complementary business.

The group says it also allows minority shareholders to realise their investment in the shares at a premium, as well as provides an opportunity for shareholders who may find it difficult to exit their investment due to low trading liquidity.

When the deal is completed, BRC Asia says it may undertake a strategic and operational review of Lee Metal and its subsidiaries in order to realise synergies, scale, cost efficiencies and growth potential.

It will also consider delisting Lee Metal from the SGX, in order to facilitate management and operational control and leverage over the company and its subsequent developments.

It adds that it presently has no intention to introduce any major changes to the business of the company, or to discontinue the employment of any of the existing employees of the company.

Should BRC Asia receive valid acceptances of more than 90% of the total number of Lee Metal’s issued shares, it would be entitled to exercise the right to compulsorily acquire all the shares of shareholders who did not accept the offer, at a price equal to the offer price.

In the FY17 ended December, Lee Metal saw its earnings fall 43.6% to $7.5 million, from $13.3 million a year ago.

The lower earnings were mainly due to changes in inventories of finished goods and work-in-progress.

See: Lee Metal posts 40.5% drop in 4Q earnings to $2 mil on higher costs of manufacturing

See also: BRC Asia to resume trading of shares from Dec 1 after restoring free float

Shares of BRC Asia and Lee Metal last closed at $1.38 and at 40 cents, respectively.

Treasure hunting

British collector and expert Harry Fane talks about what it takes to be the world’s foremost authority on vintage Cartier creations and how to spot a good investment buy at his Vintage Cartier Tank watch exhibition at Dover Street Market Singapore (May 20): Harry Fane’s love affair with Cartier began at the tender age of 17. It was the 1970s and his best friend showed up one day, decked out in two must-have items of the era: a pair of Gucci shoes with a gold buckle — “the height of fashion at the time” — and a Cartier watch. “I remember going, ‘Gosh, I really want both of....

Next stop: The interchange of public and private good

SINGAPORE (May 20): Two-minute intervals between trains. Fewer breakdowns. Clean, new buses running at a higher frequency. Bright LED screens displaying details of stops on both buses and trains. To many commuters who are enjoying these benefits, the meltdown of Singapore’s transport system in December 2011, and again in July 2015, is a distant memory. Certainly, services have improved significantly. There are new trains and buses, while existing ones have been spiffed up. There has been an overhaul of the older rail systems, presumably including fixing the grips for the electricity rail ....

Failed Innopac deal portends mining magnate Gutnick’s woes in Australia

SINGAPORE (May 20): The Australian Securities and Investments Commission (ASIC) is seeking judicial permission to wind down mining company Merlin Diamonds. The regulator is also probing into whether its chairman Joseph Gutnick failed in his duties. Gutnick, who is known as “Diamond Joe”, is under investigation for a A$13 million ($12.3 million) loan made by Merlin to AXIS Consultants, a private company linked to him. Merlin shares have been suspended from trading since October 2018. ASIC is seeking an order to appoint Deloitte to liquidate Merlin, owner of the Merlin Diamond Mine Pro....