Synear Delisting: Different benchmarks behind ‘counter-intuitive’ opinion

Published October 05, 2013

First published in Forum Letters, Straits Times, 4 Oct 2013

I AGREE with Mr David Lim Yoke Peng on the need to better protect small investors when companies delist (“Company delistings: Protect small investors”; Wednesday).

In the case of Synear Food Holdings, the counter-intuitive “unfair but reasonable” opinion of the independent financial adviser arose because of the different benchmarks it used.

This led to “unfairness” when the exit offer was assessed using certain benchmarks but “reasonableness” when other benchmarks were considered. It is like saying I am tall when compared to jockeys but short when compared to basketball players.

This reflects the subjectivity inherent in valuations, which is often masked by the “independence” of the financial advisers and an illusion of “rigour” in methodology.

Perhaps there needs to be some guidance for independent financial advisers, on factors to be considered when choosing benchmarks.

In the Synear delisting, I am also puzzled as to why a group of minority investors gave an undertaking to vote in favour of the delisting but not to accept the exit offer. This group could have made a difference in the vote against delisting.

Are they being offered a different exit price and, if so, would that be in accordance with the letter and spirit of the voluntary delisting rules?

Mak Yuen Teen

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