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Tue, Nov 17, 2020 – 3:57 pm
The ENGINEERING and services solutions firm Ellipsiz, as well as the members of the family that controls the construction company Lum Chang Holdings, will offer to buy the remaining shares of the latter at S $ 0.38 each, while keeping it listed.
The mandatory conditional cash offer was triggered after Lum Chang Managing Director David Lum’s company, Beverian Holdings Pte Ltd, purchased a 0.21% stake in Lum Chang at the highest price of S $ 0.37 per action on the open market on Tuesday.
In addition to the acquisition of shares, the low commercial liquidity of the shares was another reason for the offering, according to the offeror’s announcement Tuesday afternoon.
He added that Lum Chang shareholders will be able to make their investments with a premium. The offer price is 8.6 percent higher than Monday’s closing price of S $ 0.35. It also has a premium of about 8.6 to 10.1 percent over the volume-weighted average price per share for the one, three, six and 12-month periods through Monday.
Beverian Holdings held a 19.17 percent stake in Lum Chang through a nominee account as of Tuesday. Mr. David Lum owns 99 percent of Beverian Holdings, while his son Kelvin Lum owns 1 percent.
Bidder RMDV Investments is the bidding vehicle for the Ellipsiz consortium members, Mr David Lum and Raymond Lum, who is the CEO of Lum Chang. The two men each own a 45 percent stake in the bidder, while Ellipsiz owns the other 10 percent.
David Lum and Raymond Lum are brothers and majority shareholders in Lum Chang, with a combined 42.65 percent stake in the property development and construction company listed on the motherboard as of Tuesday.
Mr. David Lum is also the sole legal owner and beneficiary of another company, Bevrian Pte Ltd, the majority shareholder of Ellipsiz with a 60.28 percent interest. Therefore, he beneficially owns 60.28 percent of Ellipsiz.
Meanwhile, Kelvin Lum is the CEO and CEO of Ellipsiz, as well as a non-independent non-executive director of Lum Chang. He sits at the bidder’s board with his father and uncle.
The bidder noted that the trading volume of Lum Chang’s shares “has been generally low.”
The average daily trading volume of the shares amounted to just 0.02 percent of the total number of shares issued during the one-month period through Monday, and ranged from 0.03 percent to 0.06 percent. during the previous three, six and 12 months. .
Ellipsiz, which does not own Lum Chang shares, said its participation in the offering “is strategic in nature to generate better returns” by investing in Lum Chang shares for long-term investment purposes.
At the moment, RMDV intends to maintain Lum Chang’s listed status. If the free float of the latter falls below 10 percent and the Singapore Stock Exchange suspends trading, the offeror will act to lift the suspension.
The offeror may conduct a business review of Lum Chang and its subsidiaries after the closing of the offer.
RMDV plans to allow Lum Chang to continue its existing activities, with no intention of introducing major changes to the group’s business, reallocating its fixed assets, or discontinuing the employment of any existing employees other than in the normal course of business.
The consortium will finance the purchase price of the offer with financing from external sources, including loans and / or other lines of credit from banks and other credit providers. RMDV has obtained a S $ 87.2 million guaranteed loan from UOB, which can be used to finance the offering.
UOB is the financial advisor of the offeror of the offer. The bank confirmed that RMDV has sufficient financial resources to fully satisfy all acceptances of the offer.
Earlier this month, between November 5 and 11, David Lum’s Beverian Holdings had also purchased 744,600 shares of Lum Chang at S $ 0.35 each, increasing their total interest to 21.86% at the time. This came after the acquisition of 73,000 shares at the same price on October 30.
Ellipsiz and Lum Chang called for trading stops around 10.50am on Tuesday. Before that, Lum Chang gained 5.7 percent or S $ 0.02 to S $ 0.37, while Ellipsiz was flat at 32.5 Singapore cents.
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