By Romesh Navaratnarajah:

Fraser & Neave’s (F&N) effort to privatise its Hong Kong-listed unit Frasers Property (China) failed after independent stockholders turned down the deal.  

The shareholders followed the recommendation of the independent financial adviser (IFA) and independent board committee, which said the HK$0.28-per-share (S$0.05) offer was “not fair and reasonable”.

According to the joint offerors, “the scheme was not approved by the requisite majority and was disapproved by more than 10 percent of the votes attaching to all the shares held by the independent shareholders”.

Under the Hong Kong takeover code, privatisation can only be approved if at least 75 percent of disinterested shares favour the proposal, with not more than 10 percent against it.

In fact, most of those present at the court meeting voted against the offer. Of the 29 independent stockholders, 17 representing 61.7 percent or 548.5 million shares voted against the offer; while only 12 representing 38.3 percent or 340.5 million shares were in favour.

CIMB, the IFA for the shareholders, said: “Considering that the discount to the adjusted NAV (net asset value) per share is the more appropriate benchmark for assessing property companies, we are of the view that the terms of the proposal… are not fair and reasonable so far as the independent shareholders are concerned.”


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