Best Grace renews takeover bid for Delong

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Delong Holdings said Monday Best Grace Holdings has renewed its conditional takeover bid to acquire all of the company’s shares at S$7.00 each.

Best Grace’s previous offer was withdrawn in October 2018 as it would have needed to be raised to S$7.42 a share to be compliant with Singapore’s takeover code.

However, Best Grace has sought and received an exemption from the Securities Industry Council of Singapore (SIC) to make another takeover bid before the 12-month waiting period for repeating the offer was completed, Delong said in a filing to SGX Monday.

The offer is conditional upon receiving valid acceptances of 90 percent of Delong’s outstanding shares, and Best Grace does not intend to revise the offer price, the filing said.

As of Monday, the shareholders holding around 88.56 percent of Delong have given irrevocable undertakings to accept the offer, a separate filing to SGX from the offerer said. If Best Grace’s holding in Delong reaches 90 percent, it intends to delist the company and compulsorily acquire the remaining shares, Best Grace said.

The offer price is a premium of around 18.6 percent over the volume-weighted average price on a one-month basis, and a 16.5 percent premium over the last transacted price on 22 July, the offerer said.

The offer will give shareholders the opportunity to exit their entire investment at a premium which would otherwise be difficult due to the shares’ low trading liquidity, Best Grace said. Delong will be able to save on the expenses of maintaining a listed status and focus resources on its business operations, Best Grace said, adding management would also have more flexibility to make operational changes.

PricewaterhouseCoopers Corporate Finance has been appointed as the independent financial adviser to Delong’s independent directors, Delong said, adding their recommendation would be sent to shareholders within 14 days.

The offer will be funded by bank facilities from Deutsche Bank AG’s Singapore branch under a loan facility agreement, the filing said.

Best Grace is a special purpose vehicle wholly owned by Ding Liguo, or DLG, who is executive chairman, CEO and a controlling shareholder of Delong, a separate filing to SGX from Stirling Coleman Capital, acting for Best Grace, said. DLG is Best Grace’s sole director, the filing said.

DLG and his spouse, Zhao Jing (ZJ) are deemed interested in around 76.82 percent of Delong’s shares, the filing said; those shares are held by Best Decade Holdings, a wholly owned subsidiary of Golden Top Group, which in turn is a wholly owned subsidiary of Honest Joy International, the filing said. DLG and ZJ own all of Honest Joy, the filing said.

In addition, DLJ directly owns 4.66 percent of Delong and ZJ is deemed interested in those shares, the filing said.

Delong has requested a resumption of trading in its shares.

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