SINGAPORE (March 28): Sinochem International Corporation is proposing the merger of its natural rubber assets with Halcyon Agri Corp. to form what it calls “the world’s largest natural rubber supply chain manager” with combined revenue exceeding $2.3 billion.
The businesses will be combined under Halcyon Agri, which will continue to be listed on the Singapore Exchange.
Sinochem International will acquire a 30.07% shareholding in Halcyon Agri from vendor shareholders Angsana Capital, Clear Tower Investments Limited, Pascal Guy Chung Wei Demierre, Andrew Trevatt and Leonard Beschizza for $0.75 cents per share in cash. The all-cash deal will be worth at least $240 million.
Sinochem International will also make a mandatory general offer (MGO) to all shareholders of Halcyon Agri at the same price.
The offer price is 18.1% higher than the last transacted price of 63.5 cents on Jan 11 before news articles were published asserting that Halcyon Agri was in discussions with Sinochem International on a potential transaction.
Sinochem International says the vendor shareholders as well as Sam Goi Seng Hui and Credence Capital Fund II (Cayman), who collectively own an aggregate of 376.4 million Halcyon Agri shares, representing a 62.73% stake, have undertaken to vote in favour of selling their Halcyon Agri shares.
Subsequently, Halcyon Agri will make an offer for Singapore-based natural rubber producer GMG Global — in which Sinochem International has a 51% stake – at an exchange ratio of 0.9333 Halcyon Agri share for each GMG Global share.
Halcyon Agri will also buy Sinochem International’s natural rubber processing assets in China and Malaysia and trading businesses, the companies said in a joint statement on Monday.
After the transactions are complete, Sinochem International will become the majority shareholder of Halcyon Agri, which will be the holding company of the expanded group.
The deals are expected to be completed by the end of the third quarter of 2016.
