SC Global down 0.3% despite Wheelock share buy

SC Global (D2S.SG) is down 0.3%, or a half-cent, at $1.81, not reacting much despite major shareholder Wheelock Properties (M35.SG) buying about 1.205 million shares at $1.815, besting SC Global CEO Simon Cheong’s $1.80/share offer to take the company private.

It won’t cause Cheong to raise his offer as he has reiterated his intentions, says Bryan Go, an analyst at Phillip Securities.

“The company is still likely to be delisted as long as the so-called free-float falls below the 10% requirement.” Wheelock holds around 17.06%, while Cheong controls around 64.09%, leaving an around 18.85% freefloat. Wheelock also isn’t likely to make a counteroffer, Go says.

“It’s majority owned by Simon, so no matter how you offer, as long as Simon doesn’t accept, it won’t be a valid counteroffer.” But he notes, “after privatisation, they may have some influence in the privatised company. My advice to minor investors is to not follow suit because they are substantial shareholders.”

He adds, Wheelock’s portfolio of luxury residential properties is similar to SC Global’s. “Given the so-called challenging business environment, I don’t think it’s wise to acquire more such property.”