SC Global Developments' chairman and chief executive Simon Cheong is making a voluntary unconditional cash offer to take the company private at $1.80 a share, valuing the real estate developer at $745 million.
The $1.80 offer price is 49.4 per cent higher than the stock's last transacted price of $1.205 on Nov 30.
The offer, which Mr Cheong is making through his investment holding company MYK Holdings Pte Ltd, is said to be the highest premium offered for a real estate company in Singapore in the past five years.
It also represents a premium of about 15.4 per cent to the unaudited net asset value per share of $1.56 as at Sept 30, 2012.
SC Global requested a trading halt on Monday, before the start of trading.
Mr Cheong, who controls 227,754,960 shares in SC Global, representing approximately 55.06 per cent of the issued share capital of the company, said he is seeking to delist the company given the low trading liquidity of the shares, and the fact that the company has not accessed the capital markets for funds for at least the past six years.
In addition, taking the company private will allow management to have greater flexibility in managing and planning its residential property development business, even as the company dispenses with listing-related expenses and channels its resources to its business operations.
Market watchers have been speculating on SC Global's potential privatisation for some time now as they believe that if the company is fully owned by Singapore citizens, its residential projects may no longer be under Qualifying Certificate (QC) conditions, subject to government approval.
One of these QC conditions is that all units in a project must be sold within two years after the project receives its Temporary Occupation Permit (TOP).
Assuming the units are not sold within the two- year period stipulated, foreign developers have to fork out extension charges of 8 per cent, 16 per cent, and 24 per cent of the property purchase price for the first, second and third extra years respectively.