Trading has resumed for Great Eastern (GEH) (SGX: G07) after the failed delisting attempt via a voluntary offer by OCBC (SGX:O39).
Here we run through the timeline of the OCBC’s attempted delisting of Great Eastern, including the subsequent issuance of bonus shares to resume trading, what these bonus shares represent and what it means for investors.
We also look at whether it makes sense to continue holding the stock and if any potential catalysts such as another delisting attempt could be on the table.
Timeline of the voluntary offer (2024 → 2025)
May–Jul 24: OCBC launched a voluntary offer at S$25.60. Acceptances pushed OCBC’s stake above 90%, close to 94%. As a result, SGX suspended trading in Jul for GEH as free float fell below 10%.
Jun 25: In response to the suspension, GEH and OCBC proposed a new plan to resolve the situation, which included an exit offer for GEH shareholders and a plan to restore the free float by issuing a bonus share issue.
The revised OCBC exit offer was made for S$30.15 per share (for the 6+% it didn’t own) and OCBC also tabled a plan B: a one-for-one bonus issue to restore free float if delisting failed.
Jul 25: Minorities rejected the delisting (63.49% voted in favor, short of the 75% required). Shareholders also approved the new constitution (to create Class C Non-Voting Shares) and the one-for-one bonus issue to lift free float and resume trading.
Jul 25 (post-vote): OCBC said it would not make further offers “for the foreseeable future” and would take Class C non-voting shares under the bonus issue to help restore free float.
Aug 25: GEH completed the bonus issue (ordinary + Class C non-voting) minority shareholders owning 29.7 million shares electing to receive the bonus issue, while OCBC and other minority shareholders owning 5,423 shares voted to receive the Class C shares.
As a result, OCBC’s stake in GEH will be diluted to 88.19% from 93.7%, thus restoring GEH’s free float.
OCBC also undertook to elect to receive Class shares in lieu of its entitlements to the Bonus Ordinary Shares under the proposed Bonus Issue.
Aug 25: Trading resumed. Shares opened ~S$13.21 and closed ~S$13.50 on day one—about 10% below OCBC’s best (S$30.15) pre-bonus equivalent
The bonus issue & price math (why the price didn’t “really” drop)
The one-for-one bonus simply doubled the share count; the economic pie is the same, so the price roughly halves.
S$13.50 post-bonus ≈ S$27.00 pre-bonus, which is ~10% below S$30.15 (the failed delisting offer). That’s why the stock didn’t “collapse” after adjusting for the bonus shares.
Note that the first voluntary offer was at S$25.60 when the stock was trading at only $18.70 (pre bonus) in May 2024. Therefore, GEH is still trading 5.5% above the first voluntary offer and 44% above the last clean traded price before the first voluntary offer.
Class C Non-Voting Shares (what you get vs don’t get)
A non-voting share provides shareholders with ownership rights and the associated financial benefits such as dividends but do not provide for a vote on company matters.
Therefore shareholders are entitled to the same economics as ordinary shares on dividends and distributions. However, minority shareholders have now effectively halved their voting power.
In addition, Class C shares are not listed on SGX, so shareholders can’t trade them like the ordinary shares.
The Class C shares are convertible into ordinary shares only after the 5th anniversary of first issuance (or earlier upon specific events). OCBC also stated it would not convert on/after the 5th anniversary and wouldn’t make further offers in the foreseeable future.
Is GEH a buy, hold or sell now. What is the yield like?
GEH declared an FY25 interim dividend of S$0.25 per share (post-bonus). Together with the FY24 final dividend of S$0.225 (post-bonus equivalent), the trailing twelve months total dividend is about $0.475 per post-bonus share.
At ~S$13.50, that’s a 3.5% trailing yield. This yield is lacklustre when compared to many other stocks on the Singapore Exchange and would likely continue to be underwhelming even with the Management reiterating a progressive dividend policy.
Earnings per share for 1H25 is about $0.63, which would bring us to about $1.25 for the full year, thus valuing the stock at about 11 times P/E.
GEH is valued at roughly $19.5 EV/share and $9.75 NAV per share. Current share price of $13.60 is still below the current EV/share value which was probably what the minority investors holding out were after as a fair value for their shares.
Therefore, with deal optionality faded, key stock price drivers will be earnings and dividends rather than another take-private bid.
GEH is OCBC’s insurance arm, an important part of its overall business. OCBC has said that GEH is pivotal to its ambition to be a leading wealth management player in the region. OCBC has already tightened integration and increased synergies with GEH over the years, enabling the bank to deliver an even more comprehensive and innovative suite of investment, insurance, and estate planning solutions to customers. GEH has likewise benefited from expanded access to OCBC’s retail and commercial customer base.
With a near 90% stake, it is also in OCBC’s interest to continue to accelerate the synergistic work with GEH and grow as one integrated financial services group.
Will OCBC try to delist again?
It is very unlikely in the near term. After the failed EGM, OCBC explicitly ruled out further offers for the foreseeable future and elected to receive Class C non-voting shares, even committing not to convert after the 5-year window. While OCBC could revisit this again years from now as its strategic goals can change, the probability over the next few years looks low given the public guidance.
Do note that before this delisting attempt, OCBC had previously tried to delist GE twice, once in 2004 and again in 2006. Hopefully, investors won’t have to wait another twenty years for the next delisting attempt.
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