SFI directors urge shareholders to accept SATS offer

DIRECTORS of Singapore Food Industries (SFI) have urged shareholders to accept the takeover offer by Singapore Airport Terminal Services (SATS), based on the advice given by independent financial adviser ANZ Singapore.

As an alternative offer is unlikely, ‘the offer appears to be fair and reasonable to SFI shareholders’, ANZ said in a letter dated Feb 19 to the directors.

SATS, a Singapore Airlines subsidiary, had made a pitch for a 100 per cent takeover of SFI after buying 69.61 per cent of the food company from Singapore investment company Temasek Holdings for $334.5 million. It offered to pay 93 cents per share, the same price it paid Temasek.

According to ANZ, SATS’ offer price represents a 4.5 per cent premium over the last traded price on Dec 1, 2008, being the date of the last full trading day prior to the announcement date and a 24.8 per cent premium over the last traded price on the reference date.

It also represents a premium to the volume-weighted average price (VWAP) over the 30-day, 60-day, 90-day and 180-day periods up to the reference date.

ANZ said it has also considered the possibility of an alternative offer from a third party at a significantly higher price, but as at the latest practicable date, there is no publicly available evidence of such an alternative offer. SFI management also advised that there have been no pre-emptive competing offers or proposals.

‘Accordingly, the directors recommend that shareholders accept the offer,’ SFI directors said in a circular despatched yesterday.

‘In addition, based on the advice of ANZ, the directors wish to remind shareholders that as an alternative to accepting the offer and in the absence of a competing offer, they may wish to consider disposing of their shares in the open market or otherwise, realising their shares at a higher value than the offer price (after deducting all related expenses) if there is an opportunity to do so,’ they said.

As at Feb 17, SATS received valid acceptances representing some 11.845 per cent of all SFI shares, bringing its total stake to 81.453 per cent.

The offer is unconditional in all respects and will close on March 9. SATS intends to make SFI a wholly owned subsidiary and not preserve its listing status.

SATS is entitled to make a compulsory acquisition of the remaining shares it does not own if it receives valid acceptances of the offer in respect of not less than 90 per cent of the offer shares (other than those already held by the offeror, its related corporations or their respective nominees as at the offer date).

SATS had said the purchase of the region’s largest integrated food supplier will help it achieve sustainable growth powered by the twin engines of airport operations and food services.

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