SINGAPORE – Mergers and acquisitions (M&A) and privatisations are heating up in Singapore, with 14 companies being taken private or bought out to date this year.
In a report identifying more possible deals in the space, DBS Group Research analyst Ling Lee Keng said on Tuesday (July 2) that this number is “much higher” than the whole of last year, and also exceeds the deals done in 2017, when the M&A and privatisation theme was in focus as well.
According to data compiled by DBS, there were around eight key privatisation and takeover offers announced in 2018, and an estimated 14 announced in 2017, including four that did not go through.
Data from Mergermarket on Wednesday also showed Singapore bucking the regional M&A downtrend, recording US$17.1 billion in deals in the first half of this year, up 154 per cent from a year ago.
Recent premiums offered on M&A and privatisations here have been attractive, DBS’s Ms Ling said.
Companies that were privatised or delisted in the last three years were transacted at an average premium of 15 per cent over their last transacted prices before the deals were announced.
The premium for 2019 year-to-date is the highest at 20 per cent, compared to 10 per cent in 2018 and 12 per cent in 2017.
This gives shareholders an opportunity to liquidate and realise their entire investment, often at a premium to the prevailing market price, an option which may not otherwise materialise, Ms Ling noted.