In recent weeks, there has been a wave of privatisation deals, with recent ones being Singapore Land, CapitaMalls Asia and Hotel Properties Ltd. This trend is actually not new, with many companies being privatised over the years. Since 2009, a total of 129 companies have been delisted, either due to privatisation or failing to meet the listing requirements of the Singapore Exchange (SGX). You can view the list of delisted companies here. While privatisation deals have offered investors a quick gain in the short run, are investors short-changing themselves in the long run? After all, if the target company is not a good company to begin with, why would any shareholder pay a premium over the market price to privatise the company? Let us consider the issue from 3 perspectives.

Unsuccessful privatisations tell us directly what would happen to the company had the privatisation fall apart. Unfortunately, there ...