Dutech Holdings

[Coco]

Thank you GHCHUA!

[setan]

Hi setan,

If the two substantial shareholders reject the final offer and currently the company loss the free float of 10%, what will happen?

Will the share be suspended?

Yes. The shares will be suspended due to insufficient free float. Having said that, we also cannot rule out the fact that the two substantial shareholders can also accept part of their shares (and not all), resulting in each of them holding only 4.99% of the shares. That will mean free float will be more than 10% and the shares can continue trading after the offer closes.

Will the offeror able to revise the offer again? Does the revised price (if able to revise) apply to all accepted shareholders?

No. As mentioned before here, the offer price is final. Having said that, we cannot rule out the fact that they might launch another offer one year later.

Thank you for enlightening me.

[Shiyi]

Hi setan,

If the two substantial shareholders reject the final offer and currently the company loss the free float of 10%, what will happen?

Will the share be suspended?

Yes. The shares will be suspended due to insufficient free float. Having said that, we also cannot rule out the fact that the two substantial shareholders can also accept part of their shares (and not all), resulting in each of them holding only 4.99% of the shares. That will mean free float will be more than 10% and the shares can continue trading after the offer closes.

Will the offeror able to revise the offer again? Does the revised price (if able to revise) apply to all accepted shareholders?

No. As mentioned before here, the offer price is final. Having said that, we cannot rule out the fact that they might launch another offer one year later.

Thank you for enlightening me.

ghchua:
That the two substantial shareholders reduce their stakes to 4.99% each just to maintain the listing status is an interesting point. But isn't there a minimum number of shareholders for a company to be continually listed? For mainboard, a minumum of 500 shareholders?
Can't imagine a public-listed company with three or four shareholders!

[Yoyo]

Thinking aloud
If you are one of the two substantial shareholders, would you reduce your stake just to maintain listing status?  While it may be beneficial to the general investing public, it hardly be in your best interests.  IMO, unlikely.

[ghchua]

ghchua:
That the two substantial shareholders reduce their stakes to 4.99% each just to maintain the listing status is an interesting point. But isn't there a minimum number of shareholders for a company to be continually listed? For mainboard, a minumum of 500 shareholders?
Can't imagine a public-listed company with three or four shareholders!

There are currently some minority shareholders holding around 5% of Dutech since their last update. Yes, we don't know how many shareholders are there holding onto these shares. But I don't think there is only one minority shareholder holding this block. Therefore, I don't think it will end up with only 3 or 4 shareholders if indeed they reduce their stake to 4.99%. They could have also transact off market to reduce their stake to 4.99% each to other people, not necessary have to accept the offer to reduce their stake.

Anyway, I just highlight some possibility, however remote it can be. It doesn't mean it will happen.

[ghchua]

Thinking aloud
If you are one of the two substantial shareholders, would you reduce your stake just to maintain listing status?  While it may be beneficial to the general investing public, it hardly be in your best interests.  IMO, unlikely.

I am not one of them, therefore I would not be able to answer your question. I highlighted this possibility because a lot of fellow buddies here are concerned about the free float of the stock, which the company had highlighted. What I have said might not happen, but it is one of the possibility to increase the free float of the company to prevent suspension of the stock after the offer closes if the two substantial shareholders reject the revised offer.

[Shiyi]

Thinking aloud
If you are one of the two substantial shareholders, would you reduce your stake just to maintain listing status?  While it may be beneficial to the general investing public, it hardly be in your best interests.  IMO, unlikely.

I am not one of them, therefore I would not be able to answer your question. I highlighted this possibility because a lot of fellow buddies here are concerned about the free float of the stock, which the company had highlighted. What I have said might not happen, but it is one of the possibility to increase the free float of the company to prevent suspension of the stock after the offer closes if the two substantial shareholders reject the revised offer.

ghchua:
Yes, it's a possibility. In fact, it has happened before. Some years back, UIC offered to take SingLand private. A substantial shareholder by the name of Silchester cut its stake from some 13% to below 5% just to block the deal.
By the way, do you know if there is any minimum number of shareholders for a stock to be continually listed on the mainboard?

[Yoyo]

Now that Offeror has secured 79.03%, if Droege Group (8.8%) and Robert Stone (6.47%) will not bend at the revised offer price of $0.435/share, there may well be one more round - not another revision of the offer price, but based on a final settlement price to be negotiated between Dr Johnny Liu and Dr. Hedda Juliana im Brahm-Droege and Robert Stone for their respective blocks of shares. Without these 2 blocks of share, the Offeror cannot cross 90%, in order to privatise Dutech.

Let's hope the 3 meet for coffee soon.

Hi dydx
Is the final settlement price above referring to the delisting price. That is, should the GO fail, the Offeror may make his delisting offer in a few months time, at a price higher than 43.5 cents.  Is my understanding correct?

[ghchua]

ghchua:
Yes, it's a possibility. In fact, it has happened before. Some years back, UIC offered to take SingLand private. A substantial shareholder by the name of Silchester cut its stake from some 13% to below 5% just to block the deal.
By the way, do you know if there is any minimum number of shareholders for a stock to be continually listed on the mainboard?

I am not sure about this. But it is certainly not minimum 500 shareholders, as I have seen companies listed on SGX Mainboard having less than 500 shareholders. The 500 minimum shareholders requirement you have mentioned I think is upon IPO on SGX Mainboard, you need to have a spread of at least 500 shareholders.

[dydx]

Yoyo,
My assumption is that Dr Johnny Liu and Dr. Hedda Juliana im Brahm-Droege (both directors and know each other for many years already) - and also Dr Johnny Liu and Robert Stone - are talking to come to a settlement for their respective blocks of shares, as I don't believe either of them wants to stand in the way if Dr Johnny Liu is dead serious to privatise/delist Dutech. Ultimately, it is a matter of negotiating for a fairer price agreeable to both sides. If they can agree on say $0.05/share more - i.e. $0.485/share, or just another 11.5% more than the now revised offer at $0.435/share - and the two sign an undertaking to sell their blocks, that settlement price will become the new offer price for all other minority shareholders, including those who have already accepted the offer. I believe such a scenario remains likely, even though the Offeror has proclaimed the revised offer at $0.435/share being Final.

If the 3 parties could not agree on a fairer settlement price, the Droege Group and Robert Stone and other minority shareholders who cannot accept $0.435/share and choose to hold on, then this exercise may drag on further, and in the end Dutech may or may not be delisted. One thing for sure, Dr Johnny Liu will have to offer much more in the 2nd privatisation attempt.