THE majority shareholders of Challenger Technologies : 573 0% have exercised the right to compulsorily acquire all shares of the company &ndash particularly the shares of shareholders who have not accepted the offer as at the close date.

 

Following the right of compulsory acquisition, the offeror will own all the shares of the company and Challenger will be delisted from the mainboard of the Singapore Exchange at a date and time that will be announced in due course, UOB said on behalf of the offeror, DigiTech Holding, on Monday (Sep 4). 

 

DigiTech Holding is the bid vehicle of a consortium formed by Challenger&rsquo s majority shareholders.

 

The consortium comprises Asia Consumer Electronics, a special purpose vehicle (SPV) linked to Dymon Asia Private Equity, and Fortuna Capital &ndash an SPV that is wholly owned by Challenger chief executive Loo Leong Thye.

 

DigiTech&rsquo s initial cash offer for Challenger was S$0.56 per share, but this was then bumped up to a final offer of S$0.60 per share. 

 

The offeror had garnered more than 90 per cent of the total shares of the consumer electronics retailer according to a Jun 23 bourse filing, which had resulted in the public float of the shares falling below 10 per cent. 

 

As at the close of the offer on Jul 25, DigiTech had received valid acceptances representing about 97.8 per cent of the total number of shares in the company.

 

UOB said on Monday that the remittances for the appropriate amounts will be despatched to dissenting shareholders through their central depository securities accounts, or a crossed cheque drawn on a bank operating in Singapore by ordinary post, if their shares are held in scrip form.

 

These will be done &ldquo as soon as practicable&rdquo , UOB said.

THE voluntary unconditional cash offer for consumer electronics retailer Challenger Technologies : 573 0% closed on Tuesday (Jul 25), with the offeror DigiTech Holding receiving valid acceptances representing about 97.8 per cent of the total number of shares in the company.

 

As at 5.30 pm, the total number of shares owned, controlled or agreed to be acquired by DigiTech, as well as valid acceptances of the offer, stood at 394.3 million shares, or 98.2 per cent of the total number of shares.

 

DigiTech is the bid vehicle of a consortium formed by Challenger&rsquo s majority shareholders including Asia Consumer Electronics &ndash a special-purpose vehicle (SPV) linked to Dymon Asia Private Equity &ndash and Fortuna Capital, an SPV wholly owned by Challenger chief executive Loo Leong Thye.

 

The offer was made with a view to delist Challenger from the Singapore Exchange (SGX), following low trading volume and a desire for more flexibility in managing the business. 

 

As more than 90 per cent of its shares have been or will be acquired, Challenger no longer meets SGX&rsquo s free-float requirement, under which an issuer must ensure at least 10 per cent of its total number of issued shares are held by the public. This means SGX can suspend trading of Challenger&rsquo s shares after the offer has closed.

 

When the offer was first announced in May, DigiTech said the privatisation offer would provide shareholders with a &ldquo clean cash exit opportunity&rdquo to realise their investment at a premium &ndash something that might otherwise &ldquo not be available, given the low trading liquidity of the shares&rdquo .

 

It added that the move will give the company more flexibility in managing its business, as well as optimise the use of its management and capital resources to implement operational changes. 

 

This is especially crucial in the near- to mid-term, as operational costs increase, it said. &ldquo Coupled with weak retail sentiment and industry disruption resulting from the rise of e-commerce, the company has experienced a decline in revenue over the last five years.&rdquo

 

In June, the cash offer was raised to S$0.60 per share, up from the original offer price of S$0.56 that DigiTech had proposed on May 30.

 

The offer price represented a 10.5 per cent premium over the volume-weighted average price of S$0.543 per share for the company&rsquo s shares in the one-month period before the cash offer was made.

 

The trading of Challenger Technologies 573 0.00% &rsquo shares will be suspended by the SGX-ST after the company&rsquo s free float fell below the required 10%.

 

As at 6pm on June 22, the offeror, a vehicle called DigiTech Holdings, received valid acceptances of 285.7 million shares representing about 71.1% of the total shares in Challenger. Based on the list from the Central Depository (CDP), Ng Leong Hai, who has given his irrevocable undertaking to sell his shares to the offeror, holds 83.1 million shares representing 20.68% of the total number of shares in the company.

 

The board of DigiTech Holdings comprises Challenger&rsquo s chairman Loo Leong Thye and Tan Keng Soon (Keith). Tan is the founding and managing partner of private equity firm, Dymon Asia.

 

On May 30, Loo, with the help of Dymon Asia, made another attempt to privatise the company, offering shareholders 56 cents per share. Loo&rsquo s first attempt took place in March 2019 but that was rejected by the company&rsquo s minority shareholders at an extraordinary general meeting (EGM).

 

On June 6, Loo improved his offer to 60 cents per share in a bid to entice minority shareholders to sell its shares to the offeror.

Substantial shareholder Digileap Capital continues to add to its stake in consumer electronics retailer Challenger Technologies : 573 0%.

 

Over the five trading sessions from Jun 9 to Jun 15, three transactions were reported. On Jun 9, Digileap Capital bought 15,000 shares for S$9,000. On Jun 12, it bought another 440,100 Challenger shares for S$264,060. On Jun 13, it bought another 2,923,200 shares for S$1,753,920.

 

With these three transactions, Digileap&rsquo s interest rose to 18.78 per cent from 17.94 per cent.

 

Separately, Challenger&rsquo s chief financial officer Tan Wee Ko is no longer a shareholder of the company. He previously held 1,788,000 Challenger shares, representing 0.44 per cent of the company.

 

Tan had accepted an offer for his shares from Digitech Holding, which is attempting to take Challenger private through a voluntary unconditional cash offer. His acceptance of the offer will net him S$1,072,800.

 

On May 30, Digitech offered S$0.56 a share for all shares of Challenger. The offer price was later raised to S$0.60 per share, which values Challenger at S$241.1 million and 24.4 times its earnings for FY2022.

 

Digitech is 35 per cent owned by Asia Consumer Electronics, which owns Digileap. Both companies are linked to Dymon Asia Private Equity.

 

The remaining 65 per cent of Digitech is owned by a special purpose vehicle called Fortuna Capital. Fortuna is, in turn, owned by Challenger&rsquo s chief executive Loo Leong Thye.

 

The takeover is expected to give the company more flexibility in managing its business, allowing it to optimise the use of its management and capital resources to implement any operational changes.

 

Loo and his family members own 47.3 per cent of Challenger.

 

Following transactions over the last five-day period, as well as acceptances of the offer, the offeror has a shareholding of 67.94 per cent. This includes shares held by Digileap and the Loo family, and shares directly acquired by Digitech.

 

Separately, a shareholder named Ng Leong Hai, who controls 20.68 per cent of Challenger, has provided an irrevocable undertaking to accept the offer.

 

Digitech now has undertakings in favour of its offer representing 88.62 per cent of all shares.

 

Challenger had attempted to delist from the Singapore Exchange in 2019, with Digileap Capital making a cash exit offer of S$0.56 per share. The voluntary delisting was voted down by minority shareholders who believed that the exit offer price was too low.

On Jun 7, Digileap Capital bought 1,770,100 shares in consumer electronics retailer Challenger Technologies : 573 0% for a total consideration of S$1,062,060.

 

This was followed by another acquisition, on Jun 8, of 229,900 shares for a total of S$137,940.

 

The transactions brought Challenger board member Keith Tan&rsquo s deemed interest in the company to 17.94 per cent, up from 17.44 per cent.

 

Tan, a founding partner of private equity firm Dymon Asia Capital, is deemed interested in Challenger through his stake in an entity called Dape.

 

He owns more than 20 per cent of the voting shares in Dape, the sole shareholder of Dymon Asia Private Equity (South-east Asia) II. The latter is the sole shareholder of Diamond GP Holdings II, which in turn is the sole shareholder of Asia Consumer Electronics.

 

Asia Consumer Electronics is the sole shareholder of Digileap Capital, which, as at Jun 8, owns 72,061,524 shares in Challenger.

 

Challenger is the subject of a voluntary unconditional cash offer from shareholders seeking to take the company private.

 

On May 30, an entity called Digitech Holding offered shareholders S$0.56 a share for all shares of Challenger. The offer price was raised to S$0.60 per share, which values Challenger at S$241.1 million and 24.4 times its earnings for FY2022.

 

The move is expected to give the company more flexibility in managing its business, and let it optimise the use of its management and capital resources to implement any operational changes.

 

The offeror is 35-per-cent-owned by Asia Consumer Electronics. The remaining 65 per cent of Digitech is owned by a special purpose vehicle called Fortuna Capital. Fortuna is, in turn, owned by Challenger&rsquo s chief executive Loo Leong Thye.

 

Loo and his family members own 47.3 per cent of Challenger.

 

Following the Jun 8 transaction, the offeror has a shareholding of 65.31 per cent. This includes shares held by Digileap and the Loo family, and shares directly acquired by the offeror.

 

Separately, a shareholder named Ng Leong Hai, who controls 20.68 per cent of Challenger, has provided an irrevocable undertaking to accept the offer.

 

Digitech now has undertakings in favour of its offer representing 85.69 per cent of all shares.

 

Challenger had attempted to delist from the Singapore Exchange in 2019, with Digileap Capital making a cash exit offer of S$0.56 per share. The voluntary delisting was voted down by minority shareholders who believed that the exit offer price was too low.

 

Challenger Technologies' 573 0.00% chairman Loo Leong Thye has improved the privatisation offer he made on May 30 minority shareholders are now being offered 60 cents to sell their Challenger shares to a vehicle named DigiTech Holding, according to a bourse filing on June 6.

 

The offer document, issued by United Overseas Bank (UOB) on behalf of DigiTech Holding, says the offeror does not intend to revise the final offer consideration.

 

The board of directors of the offeror comprises Loo and Tan Keng Soon (Keith), identified as the founding and managing partner of Dymon Asia Private Equity (Singapore).

 

Challenger' s shares last traded at 55 cents on May 29, before trading was halted ahead of the offer announcement. Trading resumed on May 31.

 

As at June 6, persons acting or deemed to be acting in concert with the offeror collectively owned or controlled an aggregate of 260,178,374 shares, or 64.76% of the total number of shares. Apart from Loo, these shareholders include his spouse, Ong Sock Hwee his daughter, Loo Pei Fen his son, Loo Wei Kiat and Digileap.

 

The highest closing price of the shares in the five-year period, prior to and including May 29, was 61 cents.

 

Out of the 928 market days when the shares were traded, the closing prices of the shares had not exceeded the final offer consideration on 920 market days.

 

Loo and Dymon made an offer back in 2019 at 56 cents, which was rejected by minority shareholders at an EGM. Currently, Dymon Asia already holds an indirect stake of 17.44% in Challenger. Loo and his family collectively hold another 47.32%.

 

MAJORITY shareholders of consumer electronics retailer Challenger Technologies : 573 0% have made a voluntary unconditional cash offer of S$0.56 per share to take the company private.

 

The offer is being made with a view to delist the company from the Singapore Exchange (SGX), as indicated by a bourse filing on Tuesday (May 30) afternoon. 

 

The offeror, DigiTech Holding, is the bid vehicle of a consortium formed by Challenger&rsquo s majority shareholders that collectively hold around 54.4 per cent of the company&rsquo s shares. The consortium comprises Asia Consumer Electronics, a special purpose vehicle (SPV) linked to Dymon Asia Private Equity, and Fortuna Capital, an SPV wholly owned by Challenger chief executive Loo Leong Thye.

 

The rest of the Loo family holds a 10.4 per cent stake in the company. 

 

At S$0.56 a share, the offer price represents a premium of 3.1 per cent over the volume weighted average price (VWAP) for the shares traded in Challenger over the past one month. It also represents a 4.5 per cent, 6.7 per cent and 5.9 per cent premium over VWAP per share for the three-month, six-month and 12-month periods, respectively. 

 

The filing indicated that the trading volume of Challenger&rsquo s shares has remained low, with an average of about 94,335 shares being traded over the one-month period. This represents less than 0.03 per cent of the total number of issued shares for the same period.

 

The trading volume also excludes the sale of 9.2 million units at S$0.50 per share to Digileap Capital. This was done in January via a married deal, which is an off-the-market share transaction between two parties on an agreed price. 

 

The privatisation offer therefore provides shareholders with a &ldquo clean cash exit opportunity&rdquo to realise their investment at a premium &ndash something that might otherwise &ldquo not be available given the low trading liquidity of the shares&rdquo , said the offeror.

 

It added that the move will give the company more flexibility in managing its business, as well as optimising the use of its management and capital resources to implement any operational changes. 

 

This is especially crucial in the near to mid-term, as operational costs increase, it said. &ldquo Coupled with weak retail sentiment and industry disruption resulting from the rise of e-commerce, the company has experienced a decline in revenue over the last five years.&rdquo

 

DigiTech Holdings also intends to exercise its right to compulsorily acquire all shares not already acquired under the offer, before delisting from the SGX.