Category: SFI

 

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.

SFI – BT

SATS now holds 97.22% of SFI

Singapore Airport Terminal Services Limited (SATS) on Monday said as at 5pm on March 6, 2009, it holds 97.22 per cent of Singapore Food Industries Limited (SFI) shares.

Accordingly, SATS has received sufficient acceptances to exercise its right to compulsorily acquire all the remaining shares in SFI at the offer price of S$0.93 per SFI share and delist SFI from the Singapore Exchange.

SATS has extended the closing date of the offer from 5.30 pm on March 9, 2009 to 5.30 pm on March 23, 2009.

SATS has no intention of extending the offer beyond the revised date.

SFI – BT

SATS in position to take SFI private

It secures 91.5% of SFI shares; offer closes next Monday

SINGAPORE Airport Terminal Services (SATS) has accumulated enough shares in Singapore Food Industries (SFI) to de-list and privatise it.

At the close of trading on Friday last week, SATS had accumulated 472.67 million of SFI’s 516.79 million shares.

That translates to about 91.5 per cent – enough to go ahead with the de-listing and privatisation of Singapore’s largest integrated food company.

SFI said that in accordance with Rule 1303(1) of the Singapore Exchange listing manual, it will be suspending trading of its shares after the close of the offer.

Based on SATS’s offer price of 93 cents per SFI share, SATS would have spent $439.58 million on the takeover so far.

The development comes about a month after SATS’s minority shareholders gave the company the nod to buy a controlling stake in SFI from Temasek Holdings.

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, when completed, will lift the total purchase price to $509 million.

With SATS now holding 91.5 per cent of SFI, the remaining minority shareholders with the other 8.5 per cent have – for all practical purposes – little choice but to cash out or face compulsory acquisition of their shares.

According to the SATS offer document, the offer remains open until 5.30pm next Monday.

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 chief executive Clement Woon believes that a premium has to be paid for total control.

SATS believes that buying the food supplier will 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.

Also, through SFI’s presence in Europe and the UK, SATS sees potential to expand into European airline catering. SFI’s UK business has been growing at 14-19 per cent a year.

Observers believe that after the takeover, SATS will replace the senior management team of SFI with its own team.

SFI – BT

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.

SFI – BT

SATS shareholders okay SFI takover

General offer for all SFI shares triggered, lifting total bill to $509 million

MINORITY shareholders of Singapore Airport Terminal Services (SATS) have given their company the nod to buy a controlling stake in Singapore Food Industries (SFI) from Temasek Holdings.

Almost 70 per cent of minority votes cast at a meeting yesterday were in favour of SATS buying 359.7 million SFI ordinary shares equivalent to a 69.6 per cent stake. The offer price is 93 cents a share – a total of $334.5 million.

The move will trigger a general offer for all 157.1 million SFI shares, which could lift the total bill to $509 million. SATS chief executive Clement Woon said SFI shareholders will get the offer document within two weeks.

‘We only needed 50 per cent plus one vote to get this through, but what we got is overwhelming support,’ he said. ‘There is still a lot of work to do. We will move ahead with the general offer first, then start work on our integration plan.’

SATS’ controlling shareholder Singapore Airlines, with a stake of just over 80 per cent, abstained from yesterday’s vote, leaving minorities to decide.

SATS needs to secure at least 90 per cent of SFI’s shares to de-list the food company and 100 per cent for total control.

What if it does not get beyond 90 per cent? ‘We are not a financial investor,’ said Mr Woon. ‘We are in this for the synergy – to bring two companies together to create value for shareholders. Of course, we’d like a complete takeover.’ He declined to say how SFI, especially its leadership structure, will be restructured after the takeover. ‘We’ll work with the board and management when the time comes.’

SFI has appointed ANZ Singapore its independent financial adviser to counsel directors on the offer.

About 600 SATS minority shareholders voted on the takeover at a 9.30am meeting at the Hyatt Hotel yesterday. Those against the deal said the price is too high and the timing is bad.

At 93 cents a share, SATS is buying SFI at a historical price/earnings multiple of 15 times and a price/book ratio of 3.2 times. Also, the acquisition comes as the UK market – which accounts for more than two-thirds of SFI’s revenue – faces a nasty and drawn-out recession.

But according to Mr Woon, a premium must be paid for control. And as for timing, he said: ‘There is no better time. The probability of success of an acquisition is higher if it is done in a downturn.’

SATS believes that buying the region’s largest integrated food supplier will 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.

Additionally, through SFI’s presence in Europe and the UK, SATS sees potential to expand into European airline catering. SFI’s UK business has been growing 14-19 per cent a year.