In a filing with the Singapore Exchange on April 3, Standard Chartered Bank, who is representing Al-Futtaim on the unsolicited takeover, said the acquirer has cornered 87.19% of Robinson's outstanding shares. This includes the 29.9% owned by RobinsonÆs largest shareholder, Auric Pacific.
One day later, on April 4, OCBC announced it had sold the majority of its holding in Robinson to Al-Futtaim Group. OCBC held 6.05% and post-tender holds .01%.
Al-Futtaim now owns 93.24% of Robinson. It had not, at the time of its offer, clarified whether it intends to maintain RobinsonÆs listing but it is now well-placed to take the company private, should it so choose.
Al-Futtaim made its first bid for Robinson in January, offering S$6.25 per share, representing an equity value of S$537 million. The offer price was a premium of 40.1% to Robinson's last traded price on January 18. At the time, three shareholders who jointly own 23.18%, namely Silchester International Investors, Aberdeen Asset Management Asia and Tecity, had agreed to tender their shares to Al-Futtaim.
But minority shareholders waited for a cue from RobinsonÆs single largest shareholder, Singapore-listed Auric Pacific Group, before agreeing to the sale. Auric Pacific is a distributor of fast moving consumer food and non-food products with operations in Singapore, Malaysia, Indonesia and China.
Auric Pacific did not tender and by mid-March Al-Futtaim had cornered only an additional 4% of the shares. This took Al-FuttaimÆs total shareholding, including the three institutional investors, to 27%, well shy of the 50% needed to meet the minimum shareholding condition Al-Futtaim had stipulated while launching the offer.
Auric Pacific's largest shareholder is Hong Kong-listed Lippo, part of Indonesian Lippo Group conglomerate. It acquired the 29.9% stake it owns in Robinson from OCBC in June 2006. OCBC retained 6.06% so that the acquirer would not have to make a mandatory general offer to minority shareholders under Singapore Exchange rules.
Lippo paid S$203 million for the stake, representing a per share price of S$7.90 per share. After Al-Futtaim launched its offer some market commentators suggested Lippo would be reluctant to book a loss on the shares and might even launch a counter-offer.
Al-Futtaim revised its offer on March 17 to S$7 per share, up 12% and now representing an equity value of S$601.6 million. It cornered another 33% of the shares taking its total holding to 61%. But Auric Pacific wisely continued to hold out for more and Al-Futtaim was finally forced to revise upwards again on April 3 offering S$7.20 per share and valuing the retailer at about S$619 million.
And the latest offer proved attractive enough for Auric Pacific to tender its shares and then OCBC followed suit. Al-Futtaim is now offering a 61% premium to the January 18 traded price and a 65% premium on a dividend-adjusted basis.
In its filing with the Singapore Exchange, Auric Pacific cited volatility in the global environment following the subprime situation and the adverse impact this is having on consumer sentiment and spending as reasons for its decision to sell its stake. Auric Pacific also said the offer price of S$7.20 represents a 9% premium to the price at which it acquired the shares after taking into account dividends it has received.
ôThe improved offer of S$7.20 represents a 'win-win' for all parties," says Stephen Riady, executive director of Auric Pacific in a written statement. "We believe the Al-Futtaim Group understands and appreciates the Robinson tradition and business and we are leaving Robinson in good hands." He also said Auric Pacific would use the cash it realises from the sale of Robinson shares in its other retail and food businesses.
Robinson and Company is a holding company which has interests in department stores, specialty stores and retail outlets. It was incorporated in 1920 and owns or manages the Robinsons, John Little, Marks & Spencer, Principles, Trucco, Coast, River Island and Fat Face franchises in Singapore and Malaysia. Robinsons itself has been in existence since 1848.
The Al-Futtaim group has a wide range of interests including automotive, consumer electronics, retail, construction and engineering. In the Middle East it represents Ikea, Marks & Spencer and Chrysler. The offer is being made by Al-Futtaim Trading Company subsidiary, ALF Global.
Robinson shares traded down 2% from S$7.00 on Wednesday to S$6.86 on Thursday as shareholders realised the price was indeed "full and final" and no better offer could now be expected. The offer is open until April 30 and it is widely expected that the majority of the balance 7% will also be tendered in this period.
ANZ acted as the independent financial adviser and Stamford Law Corp as legal counsel to Robinson in connection with the offer. Legal advice to Al-Futtaim was provided by Baker & Mckenzie.
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