Lyon Investments, controlled by Indonesia’s Widjaja family, has acquired a 97.14% stake in Sinarmas Land, a Singapore-listed property developer.
This acquisition surpasses the 90% threshold required to initiate a compulsory acquisition of remaining shares, as per Singapore’s Companies Act.
The offer, initially set at S$0.31 per share, was increased to S$0.375 following criticism from minority shareholders and investor advocacy groups.
The revised price represents a 21% premium over the initial offer.
Lyon Investments stated that the offer price is final and will not be revised further.
The company plans to proceed with the compulsory acquisition and subsequent delisting of Sinarmas Land from the Singapore Exchange (SGX).
The acquisition is part of a broader trend of privatizations and delistings on the SGX, driven by factors such as low trading liquidity and increasing regulatory requirements.
Investor Groups Criticize Offer as ‘Exploitative’
The initial offer of S$0.31 per share faced strong opposition from the Securities Investors Association (Singapore) (SIAS), which labeled it as “exploitative” and urged Lyon Investments to revise the bid.
Baca Juga:
SIAS argued that the offer significantly undervalued Sinarmas Land, noting that the company’s net asset value was S$1.19 per share as of June 30, 2024.
Despite the revised offer of S$0.375 per share, SIAS maintained its stance, expressing concerns over the fairness of the valuation and the impact on minority shareholders.
The association emphasized the need for greater transparency and fairness in such privatization deals to protect the interests of retail investors.
Independent Adviser Deems Offer ‘Fair and Reasonable’
Sinarmas Land appointed W Capital Markets as the independent financial adviser (IFA) to assess the offer.
Baca Juga:
The IFA concluded that the revised offer was “fair and reasonable,” considering factors such as market conditions and the company’s financial performance.
The IFA’s assessment took into account the challenges faced by the property sector, including regulatory changes and market volatility, which could affect the company’s future prospects.
The board of Sinarmas Land, guided by the IFA’s opinion, recommended shareholders to accept the offer, citing the premium over market price and the opportunity for liquidity.
However, this recommendation was met with skepticism by some investors, who questioned the adequacy of the offer price relative to the company’s intrinsic value.
Delisting Reflects Broader SGX Trends
The planned delisting of Sinarmas Land aligns with a broader pattern of companies exiting the SGX, attributed to factors such as low trading volumes and stringent regulatory requirements.
Analysts note that the SGX has seen a wave of privatizations in 2025, with companies citing challenges in maintaining compliance and achieving sufficient investor interest.
Baca Juga:
The trend raises concerns about the attractiveness of the SGX as a listing venue, particularly for mid-sized firms facing increased compliance costs and limited market liquidity.
Market observers suggest that regulatory bodies may need to reassess listing requirements and support mechanisms to retain and attract companies to the exchange.
Implications for Minority Shareholders
The compulsory acquisition process will result in minority shareholders being bought out at the offer price of S$0.375 per share, regardless of their consent.
This has sparked debates about shareholder rights and the mechanisms in place to protect minority interests in such transactions.
Investor advocacy groups have called for reforms to ensure that privatization deals are conducted transparently and equitably, with adequate safeguards for all shareholders.
The Sinarmas Land case underscores the need for ongoing dialogue between regulators, companies, and investors to balance corporate strategies with shareholder protections.
Navigating the Privatization Landscape
Lyon Investments’ acquisition of Sinarmas Land and the subsequent delisting from the SGX highlight the complexities of privatization deals in today’s market environment.
While such moves can offer strategic benefits for controlling shareholders, they also raise critical questions about valuation fairness, investor rights, and market dynamics.
As the SGX and other exchanges navigate these challenges, stakeholders must collaborate to foster a transparent, fair, and vibrant capital market ecosystem.
Investors are encouraged to stay informed, engage with advocacy groups, and participate in discussions shaping the future of public listings and corporate governance.***
