United Global receives management-led buyout offer to take company private

Singapore 10-dollar billsSingapore 10-dollar bills

United Global Ltd. has received a management-led buyout offer from DMW Investments, which is owned by shareholders who collectively own around 82.93 percent of the company, at S$0.45 a share in cash, with a view to delist the company, according to a filing to SGX Friday.

“The offeror believes that privatising the company will give the offeror and the management of the company more flexibility to manage the business of the company, optimise the use of its management and capital resources and facilitate the implementation of any operational change,” DMW Investments said in the statement.

If United Global is delisted, “the company will be able to save on expenses relating to the maintenance of a listed status and focus its resources on its business operations,” it added.

The offer price is a 12.5 percent premium over the last transacted price of S$0.40 on 8 December, the last market day prior to the announcement, and a premium of around 16.67 percent to the volume weighted average price (VWAP) for the past month, the filing said.

DMW Investments is 55 percent-owned by United Global’s Mr. Wiranto, who goes by one name, 35 percent-owned by Executive Director and CEO Tan Thuan Hor Jacky, 5 percent-owned by Non-Executive Chairman Edy Wiranto, and 5 percent owned by Executive Director Ety Wiranto, the filing said.

Tan Thuan Hor Jacky is the brother-in-law of Edy Wiranto and the spouse of Ety Wiranto. Mr. Wiranto is the father of both Edy and Ety Wiranto. Mr. Wiranto co-founded United Global with Tan Thuan Hor Jacky.

Mr. Wiranto currently holds 39.85 percent of United Global, Tan Thuan Hor Jacky holds 32.94 percent, Ety Wiranto holds around 4.02 percent and Edy Wiranto holds around 6.12 percent, the filing said, adding the shareholders of DMW Investments collectively hold around 82.93 percent of the company.

In addition, DMW Investments has received irrevocable undertakings from certain shareholders — Cindy Lie, Herry Defjan, Emi Wiranto,  Tan Thuan Seng, Ng Hoi Ming, Chia Ling Budidharma and Lim Chun Lan — to offer their shares in the takeover bid, taking the aggregate representation of the bid to 90.03 percent of existing shares, the filing said. Other concert parties in the offer include relatives of Tan Thuan Hor Jacky, the filing said.

In making the offer, DMW Investments pointed to United Global shares’ low trading liquidity, adding the offer would provide shareholders who find it difficult to exit their holding due to the low volume traded an opportunity to liquidate.

If the offeror takes control of at least 90 percent of the shares, it will be able to compulsorily acquire the remaining shares of United Global as a 90 percent free float is required to remain listed.

In a separate filing to SGX, United Global said it would appoint an independent financial adviser to advise the company’s independent directors.