Billionaire Widjaja Family Offers Privatise Sinarmas Land 31 Cents Share Shares Surge 23
There has been an offer from the billionaire Widjaja family to privatise their company Sinarmas Land A26 for 31 cents per share. This offer was made through their investment vehicle Lyon Investments, which includes several members of the family’s executive team as directors. Lyon currently holds a 70.3% stake in Sinarmas Land, which operates mainly through two publicly listed subsidiaries in Indonesia.
The family believes that this offer provides an opportunity for shareholders to exit the company at a premium and realize their investments. The offer price of 31 cents per share represents a 12.7% premium over the last traded price and a premium of up to 18.5% over the volume weighted average price of the shares over the past 36 months. They also point out that the company holds a significant amount of land in Indonesia, which may take time to develop and realize profits, resulting in irregular and variable returns for shareholders.
Sinarmas Land operates mainly through two publicly listed subsidiaries in Indonesia, offering investors the opportunity to directly invest in the company’s operations. The group’s main sources of dividends are also from these subsidiaries, so the ability to pay dividends is largely dependent on their performance. Therefore, investors looking for exposure to the Indonesian market can also invest directly in these subsidiaries.
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The family also notes that the company has not raised new equity on the SGX in the past five years, and is unlikely to require access to Singapore capital markets in the foreseeable future. They believe that maintaining a listing on the SGX is not necessary and that privatization will give the company more flexibility to manage its resources and operations.
Shares in Sinarmas Land opened 16% higher following the privatization offer, reaching a high of 34 cents within the first hour of trading. The board of Sinarmas Land will appoint an independent financial advisor in due course. This offer also adds to the trend of growing delistings on the Singapore Exchange, with several companies receiving privatization offers in recent months.