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    Sep 07, 2016

    Temasek's offer price to SMRT 'fair and reasonable'

    TEMASEK Holding's $1.68-a-share offer for SMRT is "fair and reasonable", said the independent financial adviser (IFA) to the rail company's independent directors in a detailed scheme document to minority shareholders released yesterday.

    The date for a meeting when minority shareholders will vote on the offer has been set for Sept 29. Temasek, which already holds 54 per cent of SMRT shares, will abstain from voting.

    Temasek in July announced its $1.18 billion buyout offer for the troubled rail company which has seen multiple breakdowns on its lines in the past few years.

    If it succeeds, SMRT will be delisted from the Singapore Exchange, 16 years after it went public.

    One of the concerns shareholders have raised since then is why Temasek is pursuing the privatisation deal through a scheme of arrangement rather than a general offer, and whether the offer price of $1.68 per share is fair.

    In a scheme of arrangement, for Temasek's bid to succeed, a simple majority, or more than 50 per cent of shareholders present in person or by proxy at the scheme meeting, have to vote for it.

    These shareholders will have to hold at least 75 per cent of the value of SMRT shares held by all shareholders present at the meeting.

    In contrast, a general offer will succeed only if Temasek manages to secure 90 per cent of the outstanding minority shareholder votes, a significantly higher threshold.

    Rothschild, the IFA to SMRT, said - from a financial point of view - the scheme is "fair and reasonable".

    Some shareholders have asked why there are no special dividends from the sale of SMRT's rail operating assets to the Land Transportation Authority for $991 million under the proposed New Rail Financing Framework.

    The scheme document, which outlines Temasek's proposal, seeks to address such concerns.

    The scheme meeting will be convened on Sept 29, 3.30pm, at The Star Theatre, Level 5 of The Star Performing Arts Centre at 1 Vista Exchange Green.

    Shareholders can attend the meeting in person or appoint a proxy to vote.