OCBC ends Singapore Robinson ties, sells stake to Dubai retail group
Al-Futtaim now owns 87.2%; no plans outlined yet, so store could well end up being privatised
By Lee Su Shyan, Assistant Money Editor
STRATEGIC PLAN: Dubai-based Al-Futtaim has said it plans to use Robinson & Co as a springboard to South-east Asia.
OCBC Bank, the last substantial investor in the grand dame retailer Robinson & Co, has sold its stake to Dubai’s Al-Futtaim Group, severing a relationship that has lasted for more than half a century.
OCBC, which owned about 6.05 per cent or 5.2 million shares of the Orchard Road institution, announced its decision yesterday.
The bank would reap $37.4 million for its stake based on the $7.20 per share price Al-Futtaim announced after the offer closed on Thursday. It still has 6,000 shares because of a legal technicality, but it is understood that these shares will be tendered soon.
OCBC’s announcement confirmed speculations that the bank had sold its shares. The level of acceptances rose sharply after Robinson’s largest shareholder, Indonesia’s Lippo Group, cast its lot with Al-Futtaim on Thursday, indicating OCBC had also accepted the offer.
Lippo’s move to sell its 29.99 per cent stake to Al-Futtaim brought the acceptance level to 60.8 per cent. Two hours later, at 7pm, the level swelled to 87.2 per cent, with OCBC’s stake probably included.
In just over a month, OCBC had sold stakes in two companies that were part of the stable of investments built up in the 1950s by its late chairman, Mr Tan Chin Tuan.
Last month, it sold its 6.2 per cent holding in The Straits Trading Company to Tecity, Mr Tan’s family-owned investment vehicle. That deal yielded OCBC about $135.4 million.
The Robinson deal brings its total yield to about $173 million. More divestments have not been counted out.
OCBC spokesman Koh Ching Ching said: ‘We have stated that we will continue to look for opportunities to divest our non-core assets at the right time and price, and re-invest the gains in core financial services growth opportunities.’
In 2003, Robinson’s customers and shareholders were up in arms over plans that OCBC wanted to completely divest its 36 per cent stake in Robinson. The reason was a Monetary Authority of Singapore deadline calling on banks to hold less than 10 per cent of non-banking assets.
The public outcry forced OCBC to backtrack on its plans. In 2006, however, the sale was mooted again as the regulatory deadline approached. There was much less opposition that time, and Lippo swooped in to buy 29 per cent, leaving OCBC with just over 6 per cent.
There was, however, some criticism that OCBC did not insist on Lippo making a general offer that would have allowed other minority shareholders to benefit from the generous $7.90 per share price.
Fast forward to the present, and OCBC, although it receives only $7.20 per share now, has still benefited from dividends of about $1.53 a share since Lippo came in.
It was too early to note any signs of a corporate change at Robinson yesterday, although Al-Futtaim had said it would use Robinson as a springboard to South-east Asia. It is understood that its representatives are not even in Singapore yet.
With Al-Futtaim’s stake at 87.2 per cent, it is possible that by the time the offer closes, after the extension to April 30, there may not be enough free float in the market.
A DBS Vickers research note yesterday urged shareholders to accept the offer, saying the premium was attractive.
As Al-Futtaim has not outlined its intentions for Robinson’s listing status, the retailer could well end up being privatised.
Despite two changes in controlling shareholders within the space of two years, Robinson chief executive John Cheston, when asked about the impact on staff, replied: ‘Meanwhile, it is business as usual at Robinson.’
Source : Straits Times - 05 April 2008
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