A GROUP led by Silverlake Axis chairman Goh Peng Ooi has made a voluntary unconditional offer to take the enterprise technology company private at S$0.36 in cash per share, it was announced on Monday (Aug 26).
Alternatively, shareholders may choose to receive a combination of S$0.30 per share in cash, together with one new redeemable preference share (RPS) in the capital of the offeror, E2I, for each offer share.
New offeror RPSes are not and will not be listed on any securities exchange, and do not carry any voting or dividend rights. They will be mandatorily redeemed five years from their issuance at the redemption amount of S$0.18 apiece.
A S$0.0036 per share dividend was earlier proposed by Silverlake Axis’ directors for FY2024, with the record date being 5 pm on Nov 7.
Assuming that the settlement date falls after the record date such that the offeror does not receive the dividend in respect of the offer shares, this means shareholders who elect to receive the cash consideration are estimated to be paid S$0.3564 for each offer share.
Shareholders opting to receive the combination consideration will receive an estimated S$0.2964 in cash along with one new offeror RPS.
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E2I is wholly owned by Silverlake Axis’ controlling shareholder Zezz FundQ (ZFPL), which in turn holds two classes of shares comprising 603 million ordinary shares and 8.3 million redeemable convertible preference shares (RCPS).
Goh holds 100 per cent of ordinary shares in ZFPL while the RCPS are held by Merit Sigma, which is wholly owned by a fund managed by Asean private equity fund manager Ikhlas Capital.
The RCPS are convertible into ordinary shares in ZFPL and have a fixed redemption date on Feb 28, 2025.
Merit Sigma also holds 16.5 million warrants issued by ZFPL. These entitle Merit Sigma to subscribe for 16.5 million new ordinary shares in ZFPL in the event the RCPS are not converted into ZFPL ordinary shares.
In total, the offerer concert group including Goh and Ikhlas Capital holds 1.9 billion shares representing a 74.1 per cent interest in Silverlake Axis.
Based on publicly available information as at Aug 26, the company has a issued and paid-up capital of US$520.9 million comprising 2.5 billion shares.
The S$0.36 per share consideration therefore implies a cash outlay of about S$234.5 million.
This cash consideration is also noted by the offeror to represent a premium of 28.1 per cent over Silverlake Axis’ volume-weighted average price per share for one-month, 25 per cent over the three-month period, and 31.9 per cent over the six-month period up to and including Aug 23, being the last full day before the date of the announcement.
It further represents a 31.9 per cent premium over the 12-month period up to Aug 23, and is 20 per cent higher than the last transacted price per share of S$0.30 on the last full trading day.
E2I said its offer presented an opportunity for shareholders who may find it difficult to exit their investment in the company due to low trading liquidity.
Delisting and privatising Silverlake Axis would also provide the offeror and the company with greater control and management flexibility in utilising and deploying available resources, it added.
“If (Silverlake Axis) is delisted, the company will be able to save on compliance costs and human resources associated with the maintenance of a listed status and compliance with other regulatory requirements, and channel such resources towards its business operations,” said E2I.
The offer remains open for acceptance by at least 28 days from the date of the offer document’s issuance.
