SINARMAS LAND Privatisation: "Fairly high chance offer price will be hiked," says BT columnist

Singapore-listed Sinarmas Land is a big player in Indonesia’s property world, building everything from townships and residential areas to shopping centers, hotels, and industrial estates In March 2025, Sinarmas Land's controlling shareholder, the Widjaja family, had offered to buy out minority shareholders at 31 cents/share. This is a steep 73.9% discount to Sinarmas Land’s net asset value (NAV) as at Jun 30, 2024, of S$1.19 per share. The discount is glaring, of course. Business Times columnist Ben Paul didn’t hold back in his article published on 31 March (screenshot below). Tracking things, he followed up with an article today, raising the possibility of a hike in the offeror's price (screenshot below).  "The way I see it, there is now a fairly high chance that the offeror will raise its offer price." The columnist reckons that a price hike is possible in order to meet delisting conditions. Even then, it is possibly a moderately increased offer which undervalues the company.

Sinarmas Land is actively involved in developing integrated townships, residential areas, commercial properties, retail spaces, hospitality, and industrial estates. BSD City, one of its flagship projects, is a massive development covering thousands of hectares in Tangerang, Indonesia, designed as a self-sustaining city with residential, commercial, and industrial zones.

The BT article in a nutshell:

• Current Situation
  • Lyon Investments, linked to Indonesia’s Widjaja family, has increased its stake in Sinarmas Land to 92.3% after receiving valid acceptances for nearly 936.3 million shares, or 22% of total shares.
    
    
  • With less than 10% of shares in public hands, Sinarmas Land is now in breach of the minimum free-float requirement.
    
    
• Offer Price and Market Reaction
  
  • Sinarmas Land’s share price has consistently traded above the 31-cent offer price, indicating market anticipation of a possible price hike.
    
    
  • The Independent Financial Adviser (IFA), W Capital Markets, described the offer as “not fair but reasonable.”
    
    
• Delisting and Acceptance Thresholds
  • For voluntary delisting, two conditions must be met:
    • The IFA must deem the offer both fair and reasonable.
      
      
    • The offeror must achieve at least a 75% acceptance rate (already nearly met).
      
      
  • To take the company private (compulsory acquisition), the offeror needs to exceed a 97% stake.
    
    
• Valuation Concerns
  • The IFA’s estimated fair value range is S$0.35–S$0.361, only about 13% above the current offer.
    
    
  • Even at S$0.35, the offer would be just 0.41 times Sinarmas Land’s net asset value (NAV) of S$0.85 per share-well below precedent deals in Singapore, which ranged from 0.76 to 1.4 times NAV.
    
    
  • The current offer is only 0.5% above the six-month volume-weighted averge price (VWAP), whereas previous deals offered 17.6%–77.5% premiums.
    
    
• BT's criticism of Valuation Method
  • The IFA’s sum-of-the-parts approach may undervalue Sinarmas Land, as it relies on public market discounts and precedent deals, ignoring potential higher private market values.

If history repeats itself, the offer will be raised. (See: History Repeats? Widjaja Family's Low Offer for Sinarmas Land To Face Pushback)

The Widjajas have made two previous privatisation deals involving SGX-listed companies whose initial offers were upped subsequently: 

Again, whether a higher offer for Sinarmas Land will come is entirely speculative.