SFI – BT

SATS to mop up remaining SFI shares

SFI to be delisted after compulsory acquisition at 93cents a share

SINGAPORE Food Industries is a step closer to being delisted from the Singapore Exchange, now that its buyer Singapore Airport Terminal Services has accumulated over 90 per cent of its shares.

The mainboard-listed food company yesterday announced that SATS would exercise its right of compulsory acquisition under Section 215(1) of the Companies Act, with its offer price of 93 cents per SFI share.

It will then proceed to delist SFI from the SGX.

SATS advisers Merrill Lynch yesterday announced that the closing date of the offer would be extended from 5.30 pm yesterday to 5.30 pm on March 23. This means minority shareholders who have not accepted the SATS offer to date have two more weeks to do so before trading ceases on the stock.

SFI shares will be suspended at the end of the trading session on March 23.

‘The offeror has no intention to extend the offer beyond 5.30 pm on the revised closing date,’ Merrill Lynch said.

This marks the final chapter of SATS’s takeover of SFI, which started when SATS minority shareholders gave the company the nod to buy a controlling stake in SFI from Temasek Holdings in January.

Almost 70 per cent of minority votes cast at a meeting were in favour of SATS buying 359.7 million SFI ordinary shares, equivalent to a 69.6 per cent stake, for $334.5 million.

The move triggered a general offer for all 157.1 million outstanding SFI shares, which will lift the total purchase price to $509 million.

At 93 cents a share, SATS is buying SFI at a historic price/earnings multiple of 15 times and a price/book ratio of 3.2 times – a point that has drawn criticism from some SATS shareholders who reckon the price is too high in current conditions.

But SATS says a premium has to be paid if it is to take total control of SFI.

SATS believes that buying the food supplier would help it achieve sustainable growth powered by the ‘twin engines’ of airport operations and food services.

It also points out that SFI is a stable business with Singapore government contracts, such as supplying food to the armed forces, and access to the national food security programme.

Following the takeover, SATS is likely to replace the senior management team of SFI with its own team.

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