history repeats, first time as tragedy, second time as farce - Marx
those who forget history are condemned to repeat it - Santayana

In late 2006 Fraser & Neave F&N, the historical Singapore food and beverages company controlled by the Overseas Chinese Banking Corp OCBC group, issued new shares amounting to approximately 15% of its shareholder equity, to Temasek, the deep pocketed Singapore Government investment holding company, at $4.38 a share. In the following year Lee Hsien Yang, the second son of former prime minister Lee Kuan Yew, brother of current prime minister Lee Hsien Loong and previously CEO of Singapore Telecom, one of the largest companies controlled by Temasek, was appointed the new Chairman of F&N.

To all appearance, the events indicate a long term move by Singapore Inc to keep a firm hold on this venerable local icon. Few would expect in 2007 that within 6 years the company would be split up, with its beer subsidiary taken over by Dutch company Heineken and its food and beverages operation and property holdings going to TCC Assets, owned by Thai billionaire Charoen Sirivadhanabhakdi.

In fact, F&N was "in play" since July 2010 when Temasek, less than 4 years after investing in F&N, sold its shares to Kirin, a Japanese brewery, for $6.50 a share. In other words, Temasek's investment in F&N was not a strategic move to hold it long term but just a tactical step to make a quick profit. Prior to this, it was assumed that Temasek and OCBC would act in concert and their total shareholding of over 40% would make F&N takeover proof, as the price a raider would need to pay to persuade 50+% of shareholders to agree to sell, out of a free float of under 60%, would be very high. Once the 15% holding transferred from Temasek to Kirin, the assumption was no longer valid, and it was possible for an interested party to try to obtain the holding of either OCBC or Kirin first before reaching for a majority stake from the remaining shareholdings.

In July 2012 parties associated with Charoen Sirivadhanabhakdi, individuals as well as companies, managed to buy the OCBC and subsidiaries' shareholdings in both F&N and Asia Pacific Brewery its beer subsidiary, at $8.88 and $45 per share respectively, both very attractive prices at the time compared to recent trades on stock market. The news quickly brought Heineken into fray - it had a major stake in APB and was not happy to see an old partner replaced by a new one. After various possibilities were raised over several weeks, the two sides agreed that the Thai side would sell its newly acquired APB shares to Heineken (with profit) and not oppose Heineken's buying out the remaining shareholders, while in return Heineken agreed not to mount a competing takeover of F&N.

Unconfirmed reports have it that Heineken was offered first refusal to buy the F&N and APB shares from the OCBC side but was unwilling to take the whole package at the prices suggested, before the Thais clinched the deal. In the end it had to pay a higher price for APB shares but avoided the additional outlay to buy the F&N stake, which would have resulted in it being just a minority F&N shareholder or in having to incur further outlay to gain control of F&N..

For a while the market wondered whether Kirin would mount a competing takeover for F&N or simply sell its stake to TCC, or whether a local property company might mount an offer to get hold of F&N's real estate assets before selling the food and beverages business when nothing happened there, the F&N board invited the Indonesian Lippo group, through its local hotel and property subsidiary Overseas Union Enterprises, to compete. Eventually TCC upped its offer and most shareholders agreed to sell out at $9.55 and Lippo dropped out declaring that it would be too expensive to compete. I assume the OCBC guys, in hindsight, were left wondering why they did not manage to extract the higher prices for F&N and APB.

After gaining control, TCC had various options about what to do with F&N's numerous assets, including a huge cash hoard from selling its APB shares to Heineken. First there was a cash distribution, partially returning to TCC money it used to buy F&N. It then decided to spin off the property holdings of F&N as a separate entity Frasers Centrepoint Limited (Centrepoint is a popular shopping centre owned by the company and a number of other real estate holdings were already separately listed as Frasers Centrepoint Trust and Frasers Commercial Trust), so that TCC would hold the two operations under separate boards of directors with relevant experiences for the respective businesses. Later the property arm was renamed Frasers Property. "Neave" exited the Singapore market.

Sandwiched between two recently completed shopping centres, Orchard Central (you can see the building name in the upper left corner of the photo) and 313 Somerset (you can see 313 in the lower right corner), the Orchard Gateway constructed several years behind its neighbours, caused by another long running saga related to the OCBC group.

The story started with the sale of Robinson Department store (used to be located in Centrepoint across Orchard Road) in 2006 - under new banking regulations, a bank can only own up to 10% of non-financial businesses, and OCBC had to divest. However, instead of buying all the shares OCBC owned, buyer Lippo bought only 29.9%, below the 30% threshold requiring a new shareholder to make a takeover offer, thus limiting the total budget Lippo need to allocate to the new venture. In agreeing to make things convenient for Lippo, OCBC probably got some advantages in return, but left other shareholders out of the opportunity to exit at a favorable price.

Despite its lack of majority shareholding, Lippo wished to assert full control. It could have, after the Robinson share price had time to settle following the sale by OCBC, waited to buy additional shares at a lower price, so that once the 30% limit was exceeded, it could make a takeover offer at the highest paid price in the previous 6 months, and thus could gain majority control at a lower price than what OCBC got. Instead it proceeded to change the board without additional share purchase, and several existing directors lost their seats or resigned in sympathy. They soon sold their shares to the Al-Futtaim Group of Dubai, at a slightly lower price at which OCBC sold to Lippo the Dubai group then made a takeover offer and Lippo chose not to make a competing offer, contenting itself with just recovering its original investment taking into consideration the dividends it received during the two years it controlled Robinson.

The story, however, does not end here: among the ex-directors of Robinson was Ms Chew Gek Khim, the grandaughter of Tan Chin Tuan who ran OCBC for many years in the past. With cash from the Robinson sale her family investment company Tecity made a takeover offer in 2008 for Straits Trading, in opposition to the Lee family that currently control OCBC, and succeeded. In 2013 Straits Trading tried to gain control of Wearn Brothers, but was beaten back by United Engineers, allied to the Lee family. So clearly, the Robinson saga left considerable animosity between the two sides that is still working its way through the system.

Which brings us to Orchard Gateway, being constructed on land previously occupied by Specialist Shopping Centre (whose office block used to house many specialist doctors' clinics hence the name) and Hotel Phoenix, with a smaller land parcel across Orchard Road, all owned by OCBC. Originally OCBC wanted to re-develop the properties jointly with Straits Trading (banks cannot act as property developers themselves and so must have non-bank partners) after the Tecity takeover, it decided to join up with United Engineers instead. This put the operation back several years.

From the site, it looks like Orchard Gateway will be a nice looking and fancy new building. When it finally opens, the thousands of shoppers that throng its premises would be blessedly unaware of its complex history involving big casts of characters of the Singapore business world.

Capping it all, with 2020 retail scene devastated by Covid19, Al Futtam decided to exit Singapore. Robinsons, whose shares once listed at a price giving it market capitalization of over half billion singapore dollars, became just a memory.

A good many years ago UIC or United Industrial Corp's main business was making washing powder and detergent, but since the late 80s its main asset was an up to 80% shareholding in the property company Singapore Land, owner of various prominent office buildings in the city centre. For some years UIC's own shares were 48+% owned by the UOB group controlled by business tycoon Wee Cho Yaw and 36% owned by the Filipino Gokongwei group, in an uneasy alliance whose history we need not go into here.

Wee's equity is held mainly through United Overseas Land UOL, another prominent property owner in Singapore. This three-level structure obstructs the theoretical synergy between UOL and SingLand, since any major action regarding SingLand assets requires decisions by three boards of directors, and perhaps three shareholder meetings. Restructuring, however, was slow in coming because of the uncertainty of whether there will be a struggle for full control between the Wee and Gokongwei groups.
Until around 2010 the latter had more shares in UIC than the former, but the situation changed when Morgan Stanley sold a block of shares to the Wee group at a rather low price, at a moment when the Gokongwei group was unable to buy the shares because they had bought UIC shares from the market at much higher prices within the previous 6 months – a few years ago it made a predictably unsuccessful takeover offer at a lowball price when its holding exceeded 30%, and stock exchange rules mandate a new takeover offer if they bought more than 1% of shares with any 6 month period, at the highest price paid during the period.

In contrast, the Wee group could make a takeover offer, again predictably unsuccessful, at the low Morgan Stanley sale price. Since then the Wee group continued to add to its UIC shareholding, always in small amounts both to avoid bidding up the price and to avoid having to make yet another takeover offer. It remains mum about its ultimate intention, though everyone presumes it would like to obtain majority control by going over the 50% limit some day. It is also generally guessed that the Gokongwei group would like to obtain majority control if possible, but that would seem difficult in view of Wee group’s near majority

In Feburary 2014 UIC announced that it intends to buy out the 20% Singapore Land shares owned by minority sharholders, at $9.40 per share, which appears to be workable but not particularly generous, as the underlying asset value within the then real estate market was probably well over $12. In fact, the investment fund Silchester, with 8.2%, tried to extract a higher price by a byzantium manouvre: silchester was a substantial holder so its part was not counted as part of “public float” hence, if just 1.8% acceptance is received, the public float would be below 10% and UIC could apply for voluntary delisting. Silchester decided to sell part of its holding to stop being a substantial shareholder in other words, sell some shares at the current price level in order to make the remainder more valuable because it becomes harder for UIC to delist SingLand.

Despite this, on 22 april 2014 UIC announced that its holding of SinLand was 89.82% that day - it had won. But it was not a complete victory a small number of shareholders continued to resist, and UIC failed to acquire 90% of the minority shares needed to have the right to compulsory acquisition of the remainder in other words, it was stuck with these shareholders who could not sell on the public market but would not sell privately to the majority holder at the price offered.

Two years later Singland tried to pass a motion to buy out the last 0.3% of the shareholding in minority hands at the same price but was unsuccessful. Which brings me back to UIC's own shareholdings: If UIC public float goes under 10% it would get delisted, creating a situation similar to that of Singapore Land, which I am sure UIC would not want.

While buying out the 12% free float would not be a problem for UOL, the tricky issue is what would the Gokongwei group do with its 37%. If it decides to sell in the event of a takeover offer, the outlay for UOL would be very large though that might be allayed by UOL offering a combination of shares and cash in the buyout, reducing the cash needed. The alternative way to buy out the public float is for UIC to get 75% minority shares to vote for a “scheme of arrangement” for capital reduction, cancelling the shares held by the minority, paying the owners an agreed sum. Again there is the issue of whether the Gokongwei group expects its shares to be included. This scheme is all cash, so UIC will need to build up large cash reserves and credit lines. One way to do this is to list some of its buildings in a REIT, which will bring in a huge amount of cash.

Standard Standard Chartered Bank has its head office address in London, 1 Basinghall Ave, but it is not really a British bank for there is very little business done in the country. It is instead very prominent in Africa, Middle East and Southeast Asia, particularly in Hongkong where it is a "note issuing bank", along with Hongkong Bank and Bank of China, entitled to issue currency notes on behalf of the government. Its largest share holder, however, is Temesek, the sovereign wealth fund of Singapore, which bought a 12% stake from Khoo Tat Puat's estate in early 2006, for historical reasons we need not go into here, and added to it buying from the market bringing the total to around 20%.

How Khoo bought the stake originally is however interesting to recount. In 1986 Lloyds Bank mounted a takeover for SCB, and was prevented from proceeding by three Asian tycoons: Pao Yue Kong a shipping magnate based in Hongkong, Robert Holmes a'Court of Perth Australia, and Khoo Tat Puat, who jointly bought up more than 20% of the shares in just a few days, making it impossible for Lloyds to obtain a majority stake from what remained in the market unless the price was considerably raised. Lloyds gave up.

Despite its large stake, Temasek has not sought control of SCB, and may have been deterred from doing so by the possibility that the Hongkong government might withdraw SCB's note issuing privilege if it comes under control of an entity associated with a foreign government.

The joker in the pack is the stake Temasek holds in DBS, one of three Singapore local banks (the other two are UOB and OCBC). If SCB and DBS are to merge, the combined operation would have a large local operation in Singapore in addition to a widely flung international network. The combined size would put it closer to being a rival of Hongkong Bank (the two banks have neighbouring headquarter buildings in Queens Road HK as shown below) which has a large local operation in Hongkong forming a stable anchor to a widely flung international network.

Given the success of Hongkong Bank in Europe and North America, its model might hold a certain appeal to Temasek, SCB and DBS. In fact, had Lloyds succeeded in taking over SCB in 1986, it would have achieved the same model, with its UK operation anchoring a wide spread international network adding to its already existing European operations. For now however such a structure remains just a tantalizing vision.