Board of Directors
Pacific Century Regional Developments Limited
50 Raffles Place
#35-01 Singapore Land Tower
Singapore 048623
Open Letter to Board of Directors regarding recent share repurchases
Dear Board,
It has become apparent to us that Pacific Century Regional Developments ("PCRD") has
been aggressively buying back its shares over the past few weeks, with an acquisition of
103,000 and 474,100 shares at $0.405 on 29 April 2015 and 15 May 2015 respectively,
3,137,500 shares at $0.415 to $0.425 on 20 May 2015, and 3,151,700 shares at $0.44 to
$0.445 on 22 May 2015. While buying-back shares at less than intrinsic value is accretive to
all shareholders, the company is reducing its free-float rapidly and will soon be at risk of
breaching the 10% free-float requirement imposed by the Singapore Stock Exchange, and be required to delist the company.
We believe that it is your intention to delist the company. If it is indeed your intention, we
would like to request for the Board of Directors to consider to offer minority shareholders a
truly fair price for their shareholdings. Precedent transactions in Singapore indicate that
minority shareholders are often ignored during the delisting process. Acquirers in Singapore often appoint an “independent” financial advisor to justify the price that they want to pay and minorities often lack the resources to dispute the outcome, even though they have received an inequitable bargain.
The valuation of PCRD can easily be computed by any competent analyst, as most of its
assets are in liquid publicly-listed stocks such as PCCW Limited and HKT Trust. Our
calculations have led us to believe that PCRD is worth at least $0.57 per share or a premium
of 28% to the last on-market purchase you made on 22 May 2015. With only 14% of the freefloat outstanding, the company would only be paying a premium of $50 million for rewarding minorities shareholdings for investing alongside you for all these years.
We believe that a decision by the company or its acquirers to repurchase the outstanding freefloat for a truly fair price would send a positive message to the markets that corporate
governance and minority shareholders do matter to PCRD and its controlling shareholders.
It's puzzling that despite the big buying today of 942,300 shares, the stock price traded in a v narrow band of 43.5-44 cents. It's been like that over many months of buyback....
It means that people were dumping their stock to a very eager buyer? Why? Everybody knows that Pac CEntury is getting closer to the 90% trigger point, so there has to be a GO. Why are people so ready to throw an already illiquid stock into the company's hands?
