Darco shareholders right to let offer lapse; should push for more accountability, Companies & Markets

Darco shareholders right to let offer lapse; should push for more accountability, Companies & Markets

Tue, Jun 30, 2020 - 5:50 AM DARCO's deputy chairman Wang Zhi needed shareholders representing just a little over 5 per cent of the company's hol

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Tue, Jun 30, 2020 – 5:50 AM

DARCO’s deputy chairman Wang Zhi needed shareholders representing just a little over 5 per cent of the company’s holdings to take up his offer to buy their shares. He was able to get acceptances of only 3.9 per cent, which suggests minorities weren’t convinced by the chairman’s recommendation that they take the deal. But shareholders shouldn’t stop there. Recent events at Darco are not conducive to the value of the stock, and shareholders should continue to pressure the board to act on their behalf.

Mr Wang had made a general offer for all of Darco’s shares at S$0.17 per share. The offer was conditional on him accumulating at least 50 per cent of the total voting rights in Darco.

The independent financial adviser (IFA) RHT Capital had, in a June 9 circular, recommended that shareholders reject the offer because the financial terms were deemed to be “not fair” and “not reasonable”.

The offer price represented a 56 per cent discount to the company’s audited net tangible assets per share as at end-2019.

The IFA also said that the company seems to be doing well operationally. It has sufficient current assets to cover its current…



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