Oversea-Chinese language Banking Corp.’s remaining try to totally management Nice Jap Holdings Ltd. with its S$900 million ($704 million) bid shall be examined on Tuesday, capping a two-decade quest by Singapore’s second-largest lender to take over the insurer.
OCBC is simply 6.28% shy of full possession, and Nice Jap’s minority shareholders will vote at a rare common assembly whether or not to delist the 117-year-old agency with an improved bid from the financial institution. If rejected, OCBC’s so-called ‘exit offer’ will lapse, paving the best way for the insurer’s shares to renew buying and selling.
Buying Nice Jap, one of many largest insurers in Singapore and Malaysia, will enhance OCBC chief government officer Helen Wong’s technique to construct an built-in monetary providers group that may higher seize progress within the area’s booming wealth administration sector. The insurer has whole property of greater than S$100 billion with 16 million-plus policyholders—complementing the financial institution’s enterprise.
“The transaction is to streamline the group structure and we also think it opens up the potential to manage group capital more efficiently,” mentioned Jayden Vantarakis, head of fairness analysis for Southeast Asia at Macquarie Capital. Nonetheless, a full takeover would have a minimal impression on earnings or technique as OCBC is already in management, he mentioned.
Buying and selling in Nice Jap’s shares has been suspended since July 2024 after OCBC didn’t safe a adequate stage for a delisting or obligatory acquisition with final 12 months’s provide. Whereas the financial institution raised its bid by 17.8% final month to S$30.15 a share, the worth remains to be at a reduction to the insurer’s 2024 embedded worth of S$38.08 per share.
That metric has been used to worth insurers elsewhere and has been cited by resistant minority shareholders urging the next provide.
Nice Jap’s unbiased administrators have suggested shareholders to simply accept OCBC’s bid, which has been described by the agency’s monetary adviser EY as “fair and reasonable.”
The insurer has contributed a mean of about S$700 million a 12 months in internet revenue to OCBC over the previous 10 years, translating to a mean of about 15% of OCBC’s annual internet revenue over this era, the financial institution has mentioned.
Whereas delisting Nice Jap has been a long-term aim for OCBC, the financial institution is glad with its 93.72% stake, whatever the final result of the EGM, it mentioned in a assertion final month. OCBC doesn’t intend to launch one other provide within the foreseeable future, it added.
