SIAS strongly disagrees with Sinarmas Land offer valuation

It is calling for the offeror to revise their bid.

The Singapore Investors Association (SIAS) has voiced strong disagreement with the recent voluntary unconditional cash offer for Sinarmas Land, calling the offer valuation “unfair” and “significantly undervalued.”

The current offer of $0.31 per share represents a 63.6% discount to the company’s net asset value (NAV) of $0.85 per share as of 31 December 2024.

SIAS said that the offer is “exploitative” and “lowball,” raising serious concerns over its fairness.

The independent financial advisor (IFA) assessing the offer also described it as “not fair but reasonable.” However, SIAS disagreed with the IFA’s opinion, particularly its application of a 20-22% holding company discount, which SIAS believes unfairly lowers the company’s value.

SIAS also pointed out that Sinarmas Land’s unlisted assets, valued at $1.2b, were only assessed at $757.9m in the Sum-of-the-Parts (SOTP) analysis, further lowering the perceived value of the company. SIAS claimed that these assets have effectively been double-discounted.

“All things considered, SIAS therefore strongly disagrees with the IFA’s advice and the independent directors’s recommendation which was for shareholders to accept the offer,” said David Gerald, founder, president, and CEO of SIAS.

SIAS is calling for the offeror to revise their bid, demanding a price closer to the NAV of $0.85 per share.

Failure to do so could result in a prolonged trading suspension that will harm minority shareholders. The offeror has stated it does not intend to maintain the company’s listing status, and if the free float falls below 10%, trading may be suspended on the Singapore Exchange (SGX).

As the deadline for the offer approaches, minority shareholders are left to decide whether to accept the current offer by 14 May 2025 or hold onto their shares and risk the possibility of a trading suspension.

SIAS has cautioned that waiting could be risky, as there is no guarantee that any future offer will be better than the current one.