De-listing shares hurt minority shareholders

In recent times, many well-known companies were de-listed or on way to de-listing from the Singapore Exchange (SGX).

Each time when a counter is de-listed, the offer price for de-listing is lower than the highest price ever achieved by the counter in past years. The following table shows some counters and the price difference between top price against the offer price for de-listing.

Counter Top Price ($) Offer Price ($) Difference ($)
Keppel Land 9.50 4.24 -5.26
NOL 6.10 1.30 -4.80
Tiger Airways 2.12 0.45 -1.67
OSIM Int’l 2.90 1.37 -1.53
SMRT 2.28 1.68 -0.60
Eu Yan Sang Int’l 0.91 0.60 -0.31
Popular Holdings 0.50 0.32 -0.18

Note: Top Prices taken off charts of Google Finance

The share price differences are significant for small time investors. If investors bought in at high prices, then the offer prices did not offer any comfort. It is a huge loss on these investments purely on cost of purchase (excluding dividends received). Once these shares are delisted, there is no hope of future price increases.

There is this wish that major shareholders or sponsors of Initial Public Offering (IPO) companies should not take minority shareholders for a ride when they consider listing on the Stock Exchange.

Copyright © 2016, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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