Guoco Group proposes S$0.70 per share offer to take GL private

A WHOLLY-OWNED special purpose vehicle of Hong Kong-listed Guoco Group intends to make a voluntary conditional cash offer of S$0.70 per share to take GL Limited private and delist it from the Singapore Exchange.

The move will provide greater management flexibility to help GL "navigate a challenging and unprecedented operating environment" driven by Covid-19, Brexit and low oil and gas prices, hotel operator GL said in a bourse filing on Friday.

GL said its core business of owning and operating hotels in the UK has been severely impacted by pandemic-driven restrictions, resulting in most of the company's hotels being closed during the six-month financial period ended Dec 31, 2020.

On Wednesday, the company posted a net loss of US$19.8 million for the six months to Dec 31, 2020, against a profit of US$26.9 million in the year-ago period.

Guoco Group's proposed offer price of S$0.70 per share represents a 25 per cent premium over GL's last trading price of S$0.56 on Thursday, the last trading day before the announcement. It also represents a premium of 28.2 per cent, 33.3 per cent, 28 per cent and 9.5 per cent over the one-month, three-month, six-month and 12-month volume-weighted average prices up to and including the last trading day.

The implied price-to-net asset value multiple of 0.73 times represents a 19.7 per cent premium to the one-year historical average of 0.61 times, mainboard-listed GL added.

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It called for a trading halt on Friday, just before the market opened.

Guoco Group - through wholly-owned subsidiary GuocoLeisure Assets - has a 70.84 per cent interest in GL's shares. GuocoLeisure Assets has irrevocably undertaken to accept the offer and waive its right to receive the cash consideration payable for its stake.

As such, the proposed offer is the only one capable of turning unconditional or succeeding, GL said. It is conditional upon offeror GuocoLeisure Holdings receiving acceptances of no less than 90 per cent of the shares.

GL noted that the proposed offer is an opportunity for shareholders who may otherwise find it difficult to exit their investment in GL due to low trading liquidity.

GuocoLeisure Holdings intends for the company to continue with its existing activity and has no intention to introduce any major changes to the business, redeploy GL's fixed assets, or discontinue any existing staff's employment other than in the ordinary course of business.

DBS is the sole financial adviser to GuocoLeisure Holdings.