SINGAPORE (Apr 23): In recent years, there have been a number of cases in which controlling shareholders have used the threat of delisting to force out minority shareholders at unfairly low prices. We prefer to invest in businesses in which we are treated as long-term partners and are unhappy about the way Fincantieri is trying to privatise its Singapore-listed subsidiary, Vard Holdings.

This has been a disappointment, as Fincantieri has been operationally helpful, facilitating diversification after the severe downturn in the oil and gas sector, assisting in keeping the yards busy and the skilled workforce as intact as possible, and broadening the pool of managerial talent.

We understand why Fincantieri might wish to privatise Vard, now more integrated with its group operations. It was happy to make a general offer at $1.22 a share in 2012. Now that Vard has survived the down cycle and its prospects are improving, we understand why Fincantieri has wished to buy as many shares as it can at 24 cents in 2016 and 25 cents in 2017. We understand that the group operations are now more integrated: It would save costs and management time for Fincantieri if it controlled 100%. What we object to is being forced to sell at a price we consider unfair, and this may well happen under the current rules.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook