Hong Kong Stock Exchange

Tycoon fails again to take Guoco private

Unsuccessful move leaves Quek Leng Chan with headache of restoring public float

PUBLISHED : Friday, 31 May, 2013, 12:00am
UPDATED : Friday, 31 May, 2013, 4:41am

Malaysian tycoon Quek Leng Chan has failed in his latest attempt to take Guoco Group private, despite increasing the offer for the rest of the company to HK$9.37 billion.

Guoco announced last night that there would be no extension or revision of the offer.

As some shareholders had tendered their shares, the public float has fallen to 22.95 per cent, less than the minimum of 25 per cent required under the Hong Kong stock exchange's listing rules.

Guoco said it had applied to the exchange for a waiver from strict compliance with the requirement. It also said it would consider and take steps to restore the required minimum public float.

GuoLine Overseas, a unit of Hong Leong (Malaysia), of which Quek is the chairman and chief executive, proposed to privatise Guoco in December last year, offering HK$8.25 billion, or HK$88 in cash per share.

To improve the chances of a successful privatisation, Quek proposed to acquire all the remaining issued shares of Guoco at HK$100 per share in April.

The enhanced offer price represented a discount of 24.6 per cent to Guoco's adjusted consolidated net asset value of HK$132.62 per share at the end of June last year.

Quek's firms held 74.47 per cent of Guoco when the privatisation plan was announced in December. Following the failure of the privatisation, Quek now owns 77.05 per cent of Guoco.

Under the listing rules, GuoLine has to wait a year before it can make a new privatisation attempt. In 2004, Quek also failed to take Guoco private, because the offer price was lower than the market price at the time.

Guoco Group has four core businesses: investment, property, leisure and financial services. Guoco owns a majority stake in GuocoLand and GuocoLeisure, as well as minority stakes in Bank of East Asia, Hong Leong Financial and Pepsi-Cola Products Philippines.

The company posted a net profit of nearly HK$3.35 billion for the six months to December, compared with a loss of about HK$2.6 billion a year earlier.

Shares of Guoco fell 0.54 per cent to close at HK$92.50 yesterday. The benchmark Hang Seng Index fell 0.31 per cent.