OCBC's Revised Delisting Bid for Great Eastern: A Strategic Shift with Compelling Valuation

The Singapore financial sector is abuzz with the latest development in OCBC's pursuit of delisting Great Eastern Holdings Ltd. After a year of regulatory hurdles and stakeholder negotiations, the bank has revised its bid to include a 17.8% premium over its previous offer, a move that could finally settle the prolonged ownership saga. This article dissects the strategic rationale behind the premium, evaluates its alignment with Singapore's delisting guidelines, and weighs the implications for minority shareholders.

The Premium and Regulatory Alignment

Singapore's listing rules mandate that delisting offers must be deemed “fair and reasonable” by independent financial advisers. OCBC's initial May 2024 bid, which valued Great Eastern at S$1.4 billion, fell short of this benchmark, earning only a “not fair but reasonable” assessment. The revised offer, now bolstered by the 17.8% premium, aims to bridge this gap. This increase likely reflects OCBC's willingness to meet regulatory thresholds, ensuring the offer passes scrutiny.

The stakes are high: Great Eastern's shares have been suspended since July 2024 after losing its free float, and the Singapore Exchange (SGX) has set a final deadline of June 8, 2025, for the company to finalize its delisting plan or risk mandatory delisting. A successful bid would not only satisfy regulatory requirements but also resolve years of uncertainty for investors.

Historical Context: A Bid That Almost Was

OCBC's first bid targeted the remaining 11.56% stake in Great Eastern, aiming to push its ownership beyond the 90% threshold required for delisting. However, the offer only increased its stake to 93.52%, leaving minority shareholders, including the influential Wong and Lee families (3% combined), resistant to the terms. This stalemate led to the suspension of trading and prolonged negotiations, culminating in the revised premium.

The timeline underscores OCBC's persistence: after extensions in January and May 2025, the bank now faces a do-or-die deadline. Failure to finalize the proposal could force Great Eastern to pursue alternatives, such as a selective capital reduction—a less desirable option that might dilute shareholder value.

Stakeholder Dynamics: Power and Persuasion

The crux of the battle lies with the 3% minority, whose shares are pivotal to achieving the 90% threshold. While the Wong and Lee families have historically resisted ceding control, their leverage is waning. With shares suspended and delisting looming, these shareholders face a stark choice: accept the premium or risk holding shares in a delisted entity, which could become illiquid and harder to value.

OCBC's CEO Helen Wong has engaged in direct talks with these stakeholders, signaling a strategic shift from coercion to persuasion. The 17.8% premium—****—also hints at the bank's confidence in the long-term synergies of full ownership.

Strategic Valuation: Why Full Ownership Matters

Full control of Great Eastern enables OCBC to integrate its operations seamlessly, eliminating governance friction and accelerating cross-selling opportunities. For instance, combining Great Eastern's insurance portfolio with OCBC's banking services could unlock cost efficiencies and enhance customer stickiness.

Financially, full ownership removes the risk of minority veto power over strategic decisions, such as capital allocation or dividend policies. This stability could boost Great Eastern's operational flexibility and, by extension, its valuation post-delisting.

Implications for Minority Shareholders: Exit or Risk?

The revised bid presents a compelling exit opportunity for minority shareholders. The 17.8% premium exceeds historical averages for Singapore delisting offers, offering a premium that balances regulatory demands with investor fairness.

However, shareholders who reject the offer risk holding shares in a delisted company. Delisted stocks often trade at discounts in the secondary market, and liquidity constraints could persist indefinitely. The June 8 deadline amplifies urgency, as delays beyond this point may force Great Eastern into less favorable compliance measures.

Investment Thesis: A Calculated Move

For investors holding Great Eastern shares, the math is clear: accepting the revised bid likely maximizes short-term gains while avoiding the risks of delisting. The premium reflects both the regulatory floor and OCBC's strategic value, making it a rational exit.

For OCBC shareholders, the bid signals long-term consolidation in Singapore's financial sector. While the premium may strain near-term earnings, the integration benefits——could bolster OCBC's profitability over time.

Conclusion: A Strategic Compromise, Not a Casualty

OCBC's revised bid is a pragmatic solution to a regulatory and stakeholder stalemate. The 17.8% premium aligns with Singapore's fairness criteria while addressing OCBC's integration ambitions. For minority shareholders, this offer is a once-in-a-decade chance to exit at a premium in a suspended stock.

Investors should view this not as a loss but as a strategic pivot. The clock is ticking—by June 8, the path forward will be clear. For those on the fence: the premium is a bridge to liquidity and certainty in an uncertain landscape.

Analysis as of June 5, 2025. Past performance is not indicative of future results.