The market turmoil induced by Covid-19 has depressed stock prices to the point where sponsors/shareholders feel that the value of their investments would be better realized in the private markets. Earlier this week, a consortium comprising some of Perennial Real Estate Holdings Limited’s substantial shareholders announced a voluntary conditional cash offer to privatize and delist PREH at a price of S$0.95 in cash.
This article will breakdown the terms of the deal, deal rationale and next steps for existing shareholders and potential traders.
Terms of the deal
The consortium currently owns 82.43% of PREH and other shareholders will receive S$0.95 in cash for each share owned. Non-consortium shareholders that accept the offer will still be entitled to receive the final dividend of 0.20 cents per share for FY19.
The offer is conditional on the consortium receiving enough acceptances to give it at least 90% stake in PREH, following which it will exercise its right to compulsorily acquire all the remaining shares and delist PREH.