SINGAPORE (Mar 21): Challenger Technologies has received a 56 cents per share cash offer from the family of founder Loo Leong Thye and its partners to delist the retailer of IT products.
Challenger says delisting will provide greater operational flexibility to manage the business, given the company is facing challenges from weak retail sentiment and industry disruption.
“Changes to the business may need to be implemented and dividends could be affected during such time,” it adds.
Challenger also says it has not carried out any exercise to raise cash funding on the SGX since its listing in 2007 and is unlikely to require access to Singapore capital markets to finance its operations in the foreseeable future.
The offer vehicle is Digileap Capital, a partnership between the Loo Family, Ng Leong Hai and Dymon Asia Private Equity (S.E. Asia) Fund II (DAPE II).
The offer represents a premium of 15.1% over the volume weighted average price (VWAP) of 48.7 cents for the 12-month period up to and including the last full market day as well as a premium of approximately 110.1% to the net tangible asset value of Challenger as at Dec 31 2018.
Shares in Challenger last traded at 53 cents on Mar 15.
Undertaking shareholders collectively owning a stake of 78.64% have given their irrevocable undertakings to vote in favour of the delisting resolution and accept the exit offer.
The proposed voluntary delisting is conditional on the Singapore Exchange's approval of Challenger's application, and a resolution being passed at an extraordinary general meeting.
If the latter resolution is passed, Challenger will be delisted irrespective of the number of acceptances received for the exit offer.
As the company has proposed that a final dividend of 2 cents per share for the financial year ended Dec 31 2018 and assuming the settlement date in respect of the offer shares validly tendered in acceptance of the exit offer falls after the books closure date, the exit offer price received by an accepting shareholder shall be 54 cents each.
