Published July 18, 2009

Bid to delist CK Tang hits another road block

EGM adjourned; board urged to get new valuation of flagship store

By JAMIE LEE

	Email this article
	Print article
	Feedback

IT'S not victory yet for the Tang brothers looking to delist CK Tang in their third attempt.

STRONG EMOTIONS Shareholder Alan Goei was overcome after the resolution for the adjournment of the EGM was passed

Minority shareholders snatched a rare adjournment of the extraordinary general meeting (EGM) half-way through it yesterday and pressed the board to get another valuation of the flagship store based on its redevelopment potential.

Following the adjournment of the EGM to July 31, the closing date of the offer at 83 cents a share has also been extended to Aug 14.

'We have to go back and deliberate,' said chief executive Foo Tiang Sooi when asked if the directors would commission another valuation report, adding that they would seek advice from the Singapore Exchange.

Shareholder Alan Goei, who shed tears after the resolution for the adjournment was passed, said he may commission his own valuation report for the board's review before the next meeting.

During the EGM, some among the 100-odd crowd hit out at the valuation based on the property's existing use that resulted in its $340 million price tag.

Mr Goei - a director at real estate firm Goldhill Developer - said that in 2007 the board valued the property based on redevelopment scenarios and he asked the directors to do so again. Based on his own valuation feedback, Mr Goei said CK Tang could be worth $80 million more if a residential block is built on the site.

He also threw out a $450 million counter-offer on the spot and told BT that he would be meeting a consortium of private investors to try to get funding.

But Mr Foo said that from the 2007 report, values from making some redevelopment assumptions were 'similar or lower' than values based on existing use.

The board felt that valuing the property based on redevelopment potential would be 'academic', said Mr Foo. 'Since (existing use) has been the thinking all along, and sincerely so, we valued the company on that basis.'

He also noted that because the store is situated in a 'hotel zone', plans for residential apartments may not work.

The Tangs - who were absent from the EGM - have maintained as part of their privatisation attempts that there are no plans to redevelop the property.

Shareholders criticised the directors for not clarifying with the Tang brothers if they would redevelop the property once the firm is privatised, with some crying out 'shame, shame'.

'Assuming the Tang brothers succeed, they would be able to develop the site at their own time and whim,' said one shareholder who declined to be named. 'We expected all the independent directors to analyse (this) deeply.'

'You disappointed all the loyal shareholders,' said another investor, a Mr Toh, before waving a stack of annual reports bundled with raffia string.

But the directors said that the recommendation to shareholders to accept the offer came after an evaluation from the independent financial adviser.

They said they had asked for a clarification from the Tangs but were referred back to their earlier statements. The brothers also declined to attend the EGM, despite calls from the directors to do so.

As at yesterday, the total stake held by the Tangs - including the number of accepted offers - stood at 89.51 per cent. The delisting will go through if votes against it total less than 10 per cent of the issued shares.