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Proposed Arrangement Proposed Arrangement To Issue Pidemco Land's Shares In Board Lots To DBS Land Sharesholders - Solution To Odd Lot Issue

Back10 Aug 2000

Background

On 12 July, 2000, DBS Land Limited ("DBS Land") and Pidemco Land Limited ("Pidemco") announced the proposed merger between the two companies ("Merged Group"), pursuant to which each DBS Land share would be exchanged into 0.928 Pidemco share.

The exchange ratio of 0.928 would result in numerous DBS Land retail shareholders who currently hold board lots receiving odd lot Pidemco shares on completion of the merger.

Management of both companies have reviewed various options to address this odd lot issue, whilst retaining the economic and financial effects of the merger for the shareholders of DBS Land and Pidemco as previously announced.

Solution to Odd Lot Issue

We are pleased to announce a solution to the odd lot issue. For the trading convenience and benefit of DBS Land shareholders and to allow them to receive board lots in Pidemco in exchange for the board lots they currently hold in DBS Land, the exchange ratio needs to be changed to 1 i.e. one DBS Land share will be exchanged for one new Pidemco share. As DBS Land shareholders will receive more shares of the Merged Group under the new arrangement, existing Pidemco shareholders would also have to receive a higher number of Pidemco shares in order to preserve the same economic and financial effects of the deal as previously announced. Hence, Pidemco will, before the merger, issue 86.49 million new shares to its existing shareholders out of its share premium account. The total number of shares in the Merged Group will be 2,517.35 million, of which DBS Land shareholders will own 1,316.03 million and Pidemco shareholders will own 1,201.32 million. The shareholders of DBS Land will own 52.28% of the Merged Group under the new arrangement, which is the same percentage ownership as under the original exchange ratio of 0.928.

As the Merged Group would now have a larger number of shares on completion of the merger, the NTA per share, RNAV per share and EPS per share of the Merged Group will correspondingly be adjusted downwards. However, as all shareholders (ie of DBS Land and Pidemco) will be receiving more shares under this new arrangement compared to the previous arrangement, the total value accruing to each shareholder will be preserved.

As a result of the new arrangement, the exchange ratio for DBS Land's RCCPS will be one DBS Land RCCPS for one Pidemco RCCPS at the conversion price of S$5.43 per share instead of S$5.85 per share as previously announced. As there would be more shares in the Merged Group on completion of the merger, the economic and financial effects to DBS Land RCCPS Holders will also remain the same as previously announced.

This solution to address the odd lot issue is possible because of the current status of Pidemco as an unlisted company wholly owned by a single shareholder group, namely Singapore Technologies Group.

Attached is an analysis to show that the financial effects announced on 31 July 2000 will remain the same.

(You will need Adobe Acrobat Reader to view the above attachment.)


Issued by: DBS Land Limited and Pidemco Land Limited
Date: 10 August 2000