SINGAPORE (Apr 29): Over the past couple of weeks, shares in Challenger Technologies have intermittently traded above 56 cents, the amount of cash minority investors will receive for each share they own as part of the company’s plan to delist from the Singapore Exchange. Is this just a short-term market anomaly? Or, is it a sign that a better exit offer price is in the offing?

First of all, let me say that I have no inside knowledge of Challenger’s delisting proposal, and I don’t know any more about its business than anyone else in the market. Everything I’m about to say is based on nothing more than information in the public domain and my own observation of events that have unfolded recently.

The delisting plan seemed to be a done deal from the outset, because shareholders holding a combined 78.64% of the company had provided an irrevocable undertaking to vote all their shares in favour of the delisting and accept the exit offer. Under existing rules, a company may delist voluntarily if at least 75% of its shares vote in favour of the move, and no more than 10% vote against the move. As the exit offer price was above levels at which the stock traded over the past year, it seemed unlikely that minority investors holding at least 10% of the company’s shares would bother to turn up to vote against the delisting.

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