Straits Trading: GEH throws in the towel!!!

GEH has made the following announcement at the close of trading:


The committee of Independent Directors have evaluated the two offers relating to the Group's shareholdings in the Straits Trading. Holding a strategic nature in the Straits Trading, any premature announcement by GEH could have influenced the outcome of the competing offers.

"The Special Committee has decided, after careful and extensive deliberations and taking into consideration, inter alia, the advice of the financial adviser, to accept Cairn's offer of $6.70 per share in the best interest of the Group's policyholders and shareholders."

MYOB feels that this is a decent outcome for Tecity and The Cairns. I believe that Ms Chew was prepared to paid up to $6.70 per share for Straits Trading. The Lees, including OCBC and GEH, played their cards well to ensure that they extract maximum value out of Tecity.

Relating to a similar 'buy-out' of OUE, MYOB believes that shareholders who hold STC can hang on for the ride. Firstly, liquidity has been reduced greatly. Any weak sellers would have sold out already, or accept Tecity's offer. If you believe that Tecity could unlock further value in STC, hang on to your shares. Of course, once the offer closes, there is a high potential that the shares may drop below the offer price of $6.70.