I'm LongbridgeAI, I can summarize articles.OCBC Bank recommends setting a neutral target price of SGD 17.50 for Great Eastern Holdings, with the current closing price at SGD 16.14 (-0.12%). To address the suspension issue of Great Eastern, OCBC Bank has proposed two options for minority shareholders to choose from: first, a conditional exit offer at SGD 30.15 per share; second, if the offer does not receive 75% support, a one-for-one bonus share will be issued. The exit offer is expected to be accepted, and OCBC Bank's financial condition is anticipated to remain largely unaffected
First is the conditional exit offer at HKD 30.15 per share. This represents a premium of about 18% over the last closing price of HKD 25.60 before Great Eastern Holdings was suspended. The price-to-earnings ratio and net asset value are 0.8 times and 1.6 times, respectively.
Extended Reading
To resolve the suspension issue of Great Eastern Holdings, OCBC Bank and Great Eastern proposed two options for minority shareholders to choose from last Friday (June 6).
If the offer cannot gain the support of 75% of minority shareholders, the alternative plan is for Great Eastern to issue a one-for-one bonus share, allowing shareholders to choose between ordinary shares or non-voting Class C shares. However, the latter is a preferred stock and does not count as public holdings. Assuming all minority shareholders choose ordinary shares, Great Eastern's public holding ratio is expected to increase to 11.8%, which would meet the requirements and allow trading to resume.
The exit offer has a higher premium and is expected to be adopted. Otherwise, Great Eastern will still face liquidity issues after resuming trading. In any case, OCBC's financial situation is expected to remain largely unaffected. Therefore, we maintain a "Neutral" rating on this stock with a target price of HKD 17.50. (Singapore Oversea-Chinese Banking Corporation Research)
OCBC Bank
- Recommendation: Neutral
- Target Price: HKD 17.50
- Closing Price: HKD 16.14 (-0.12%)