SINGAPORE: Great Eastern Holdings (GEH) could resume trading after shareholders voted against a proposal to delist its stock at an extraordinary general meeting (EGM) on Tuesday (Jul 8).
The insurer said only 63.49 per cent of minority shareholders voted in favour of the delisting proposal, falling short of the 75 per cent approval needed to go ahead with the proposal.
Majority shareholder OCBC and its concert parties abstained from voting.
In June, the bank had offered S$30.15 apiece for the 6.28 per cent stake in Great Eastern, one of the largest insurance firms in Singapore and Malaysia, that it does not own.
It also then said it had no intention to make another offer to buy the rest of Great Eastern in the future in the event shareholders opted to not delist the insurer from the Singapore bourse.
With the vote for a delisting resolution having fallen through, OCBC said in a statement on Tuesday that its conditional exit offer had lapsed, ending its effort to take the 117-year-old insurer private.
It also reiterated that it does not intend to make further offers for Great Eastern "in the foreseeable future".
The bank pointed out that in October 2024, it had increased its stake in Great Eastern to 93.72 per cent, achieving its goal of capturing "benefits from further operational synergies" with the insurer and attaining a "higher share of its value".
"Regardless of the outcome of the EGM, we are satisfied with this level of economic interest," said OCBC, referencing its June statement.
"OCBC will continue to accelerate the synergistic work with GEH as we grow as one integrated financial services group."
Shareholders also voted on two resolutions aimed at restoring Great Eastern's free float and the trading resumption of the insurer's shares on the Singapore Exchange (SGX), with both resolutions passed.
Trading in shares of Great Eastern has been suspended since July last year, after its free float fell below 10 per cent following an offer by OCBC to acquire an 11.56 per cent stake at S$25.60 apiece in May 2024.
"As GEH’s parent, OCBC has supported GEH’s proposal to resolve the 11-month trading suspension of its shares at today’s extraordinary general meeting," the bank said.
Great Eastern will proceed to carry out a one-for-one bonus issue of shares so as to allow it to satisfy the minimum free float of 10 per cent required under the listing rules to resume trading on the Singapore Exchange (SGX).
As part of the process for the bonus Issue, shareholders will be invited to elect whether to receive ordinary shares, which will be listed and traded on SGX or Class C non-voting shares, which will not be listed or traded.
OCBC said it will elect to receive Class C non-voting shares under Great Eastern's bonus issue. These shares are entitled to dividends and other distributions, and will be earnings accretive to OCBC.
The bank added it "would not convert these newly-created Class C on-Voting shares on and after the fifth anniversary of the issuance as it would result in GEH losing its free float again".
Great Eastern said it will separately inform shareholders of the timetable of the bonus issue through announcements on SGXNET, while shareholders who wish to receive ordinary shares do not need to take any action.
The insurer has contributed an average of about S$700 million annually in net profit to OCBC over the past 11 years, which translates to an average of about 15 per cent of OCBC's annual net profit over this period.
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The insurer said only 63.49 per cent of minority shareholders voted in favour of the delisting proposal, falling short of the 75 per cent approval needed to go ahead with the proposal.
Majority shareholder OCBC and its concert parties abstained from voting.
In June, the bank had offered S$30.15 apiece for the 6.28 per cent stake in Great Eastern, one of the largest insurance firms in Singapore and Malaysia, that it does not own.
It also then said it had no intention to make another offer to buy the rest of Great Eastern in the future in the event shareholders opted to not delist the insurer from the Singapore bourse.
With the vote for a delisting resolution having fallen through, OCBC said in a statement on Tuesday that its conditional exit offer had lapsed, ending its effort to take the 117-year-old insurer private.
It also reiterated that it does not intend to make further offers for Great Eastern "in the foreseeable future".
The bank pointed out that in October 2024, it had increased its stake in Great Eastern to 93.72 per cent, achieving its goal of capturing "benefits from further operational synergies" with the insurer and attaining a "higher share of its value".
"Regardless of the outcome of the EGM, we are satisfied with this level of economic interest," said OCBC, referencing its June statement.
"OCBC will continue to accelerate the synergistic work with GEH as we grow as one integrated financial services group."
Related:
TRADING SUSPENDED SINCE JULY 2024
Shareholders also voted on two resolutions aimed at restoring Great Eastern's free float and the trading resumption of the insurer's shares on the Singapore Exchange (SGX), with both resolutions passed.
Trading in shares of Great Eastern has been suspended since July last year, after its free float fell below 10 per cent following an offer by OCBC to acquire an 11.56 per cent stake at S$25.60 apiece in May 2024.
"As GEH’s parent, OCBC has supported GEH’s proposal to resolve the 11-month trading suspension of its shares at today’s extraordinary general meeting," the bank said.
Great Eastern will proceed to carry out a one-for-one bonus issue of shares so as to allow it to satisfy the minimum free float of 10 per cent required under the listing rules to resume trading on the Singapore Exchange (SGX).
As part of the process for the bonus Issue, shareholders will be invited to elect whether to receive ordinary shares, which will be listed and traded on SGX or Class C non-voting shares, which will not be listed or traded.
OCBC said it will elect to receive Class C non-voting shares under Great Eastern's bonus issue. These shares are entitled to dividends and other distributions, and will be earnings accretive to OCBC.
The bank added it "would not convert these newly-created Class C on-Voting shares on and after the fifth anniversary of the issuance as it would result in GEH losing its free float again".
Great Eastern said it will separately inform shareholders of the timetable of the bonus issue through announcements on SGXNET, while shareholders who wish to receive ordinary shares do not need to take any action.
The insurer has contributed an average of about S$700 million annually in net profit to OCBC over the past 11 years, which translates to an average of about 15 per cent of OCBC's annual net profit over this period.
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