Privatisation deals on the Singapore Exchange (SGX) are usually successful as investors are keen to cash in on the premium over the market price prior to the deal. In my last blog post, I discussed whether investors are short-changing themselves by giving up long-term gains in return for quick short-term gains. In this post, we will dissect the various types of privatisations and explore whether investors should agree to the privatisation.

In this type of privatisation, a parent company will offer to buy out all remaining shares of a listed subsidiary that it does not already own. In most cases, the parent company would already have majority control of the subsidiary prior to the privatisation deal. Recent examples of such companies include Singapore Land and CapitaMalls Asia. Since the parent company already has majority control, the main reason for the privatisation could be because the ...