It is worth noting that Class C shares can be converted into common stock after a five-year term. OCBC has shown that privatization of Big Oriental is its strategic intention.
Dadongfang has suspended trading since July 15 last year, and it has been nearly 11 months since then. OCBC pointed out that the proposal provides an exit mechanism for small shareholders who cannot trade stocks. Independent financial advisor Ernst & Young believes that the relevant financial terms are "fair and reasonable".
The Securities Investment Association issued a statement on Friday (June 20), first asking the board of directors of the Great Oriental to explain its role in negotiating with the acquirer OCBC Bank and reaching the 30.15 yuan exit bid.
OCBC Bank closed its stock price at 15.9 yuan on Friday, down 0.56%.
In addition, Ernst & Young (EY) was again appointed as an independent financial advisor in this offer. Therefore, the Securities Investment Association asked Dadongfang to explain the selection and recruitment procedures, whether other companies are considered during the process, and whether repeated recruitment affects the independence of financial consultants.
OCBC Bank made an offer last year at RMB 25.60 per share. At that time, the Independent Financial Advisor (IFA) assessed it as "unfair but reasonable", but the independent directors still advised shareholders to accept it.
The main basis for this round of quotations is the embedded value of Big East as of the end of last year. However, the Securities Investment Association said that Big Oriental has performed strongly since then, with the inclusion value of new businesses increasing by 19% year-on-year in the first quarter and the profit attributable to shareholders increasing by 13%.
In terms of company prospects, the Securities and Investment Commission asked the Board of Directors of the Great Oriental to explain whether it is neutral or is actively striving to achieve the 75% support votes required for delisting. It also questioned how long-term investors will not face the risk of suspension of trading again if OCBC Bank lowers its public shareholding ratio five years later after Big Oriental resumes trading.
The special shareholders' meeting of Great Eastern Holdings' privatization will be held on July 8. The Securities and Investors Association of Singapore (SIAS) has raised several inquiries to the company's board of directors regarding delisting proposals and related arrangements.
The Securities Investment Commission questioned whether the board of directors disclosed its valuation in advanceOCBC Bank earlier proposed a delisting proposal to voluntarily delist at a price of 30.15 yuan per share. If this proposal is not approved, the company will distribute bonus shares through a "one-to-one" method. OCBC will choose to receive Class C shares without voting rights and meet the public shareholding ratio requirements and resume transactions.
The Securities Investment and Investment Committee questioned what valuation framework, judgment criteria or investment principles the board of directors used in the two offers to guide its recommendations to shareholders.
Securities Investment Association therefore questioned whether this means that the current quotation has not reached the threshold of 0.8 times the inclusion value, which will ultimately benefit the bidder and harm the interests of small shareholders.
Securities Investment Association also questioned whether the valuation between RMB 30.10 and RMB 37.63 per share will be disclosed to the acquirer in advance to affect the final quotation.