Indonesia's Widjaja family raises offer for SGX-listed Sinarmas Land by 21%
The closing date of the revised offer has also been extended from May 14 to May 29. ST PHOTO: LIM YAOHUI
SINGAPORE - Shares of Sinarmas Land jumped by around 19 per cent to 38 cents when the market opened on May 13, after the Widjaja family upped its offer to take the company private on May 10.
Lyon Investments, which is controlled by the Widjajas, one of Indonesia's richest families, raised the price it is willing to pay for the remaining shares of Sinarmas Land by 21 per cent to 37.5 cents per share, or $1.6 billion in total, following criticism from minority shareholders that its original offer was too low.
The closing date of the revised offer has also been extended from May 14 to May 29.
Sinarmas Land is one of Indonesia's largest property developers and part of the Widjaja-owned Sinarmas conglomerate, which also controls Singapore-listed Golden Agri-Resources.
As at May 9, Lyon Investments had already received acceptances from shareholders collectively holding 23.85 per cent of the shares in Sinarmas Land, giving it control over 94.15 per cent of the company.
At those levels, Sinarmas Land's free float is now below 10 per cent, implying that trading of its shares may soon be suspended on the Singapore Exchange (SGX) to comply with listing rules.
Lyon Investments first offered to take Sinarmas Land private on March 27 at 31 cents per share, or $1.32 billion in total, citing the low trading liquidity of the company's shares, among other things.
No action is required from shareholders who accepted the original offer at 31 cents, as they will automatically receive the higher price.
The revised deal follows an assessment by independent financial adviser (IFA) W Capital Markets, which deemed the offer 'not fair but reasonable' and valued each Sinarmas Land share between 35 and 36.1 cents.
Current listing rules require any delisting offer to be both 'fair and reasonable' for it to go through, and be approved by 75 per cent of independent shareholders present at an extraordinary general meeting.
According to the exchange regulator, an offer is 'fair' if the value of the offer price is greater than or equal to the value of the shares subject to the offer.
Additionally, when considering whether an offer is 'reasonable', an IFA should give regard to matters including the concentration of pre-existing voting power in the shares of the issuer, the market liquidity of the shares, and the likelihood of an alternative offer being made.
In a May 5 statement, the Securities Investors Association (Singapore), or Sias, noted that many minority shareholders had expressed unhappiness over the 31 cents per share offer for Sinarmas Land, which it said was widely seen as 'lowball'' and therefore 'exploitative'.
Among other things, Sias noted that Sinarmas Land's net asset value per share as at Dec 31, 2024, was about 85 cents, implying the offer was pitched at a 63.6 per cent discount. It also questioned the methods used by the IFA to value the company's assets.
In response, W Capital Markets said in a May 6 statement that its valuation methods were 'appropriate' and 'consistent with widely accepted industry practice'.
The offer for Sinarmas Land also comes amid a spate of privatisation offers in 2025. So far, at least nine other companies have announced potential delistings this year . They are: SLB Development, PEC, Sin Heng Heavy Machinery , Econ Healthcare, Murata Manufacturing, ICP, Amara Holdings, Procurri Corp, and Ban Leong Technologies .
The shareholders of two other companies, Japfa and Paragon Real Estate Investment Trust, have already accepted offers for the companies to be taken private and will be delisted.
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