Property tycoon Koh Wee Meng in another privatisation deal with 12 cents offer for Global Dragon

Koh Wee Meng, through an entity called JK Global Wealth, plans to privatise Global Dragon, which he controls, with an offer of 12 cents per share.JK Global Wealth, acting through DBS, has offered shareholders an opportunity to realise their investments in Global Dragon at a premium of around 14.3% over its last traded price before the offer was made.Koh and his related parties already control 81.98% of Global Dragon, or some 559.06 million shares, and hold a 59.3% deemed stake via an entity called JK Global Assets.The offer price of 12 cents is a 15.4% premium over the 1-month volume weighted average price and a 17.6% premium over the corresponding 12-month figure. This represents a 0.99 times multiple Tengah EC of the company’s net asset value as at Dec 31 2022.

Property tycoon Koh Wee Meng, through an entity called JK Global Wealth, plans to privatise another developer Global Dragon.This comes after the October 2021 privatisation of Fragrance Group, another company that Koh Wee Meng controls.As at Feb 10, the shareholdings of Koh and his related parties in Global Dragon stands at 81.98%, meaning a total of 559.06 million shares.With the deemed stake of 59.3%, held via an entity called JK Global Assets, Koh Wee Meng controls Global Dragon.

According to the offer document released on Feb 10, JK Global Assets has given an irrevocable undertaking to the offeror, JK Global Wealth.Second largest shareholder of Global Dragon, Tan Su Lan @ Tan Soo Lung, is the mother of Koh Wee Meng.Meanwhile, Koh Kian Soo, the executive chairman of Global Dragon, is the brother-in-law of Koh Wee Meng.Ko Lee Meng, wife of Koh Kian Soon, is another substantial shareholder of Global Dragon.

As stated by DBS, acting on behalf of JK Global Wealth, this offer will present shareholders with a 14.3% premium over Global Dragon’s last traded price of 10.5 cents on Feb 7.Moreover, the offer price of 12 cents is a 15.4% premium over the 1-month volume weighted average price, and a 17.6% over the corresponding 12-month figure. This price represents a 52.3% rise in the 0.99 times multiple of the company’s net asset value as at Dec 31 2022.

Global Dragon has two ongoing property development projects, both of which are landed residential developments. One is along Jalan Daud and the other along Woo Mon Chew Road. These projects are likely to receive their respective TOPs by the end of current FY2023 ending June 30 2023.

On the property investment front, Global Dragon owns 12 units of 999-year leasehold office units in the CBD, with an average tenancy of 87%.In addition, the construction of a 194-room hotel along Telok Blangah Road is also underway and is likely to be completed in 1HFY2024 ending Dec 2023.

Hence, the offer by JK Global Wealth presents shareholders with an attractive opportunity to realise their investments in Global Dragon at a premium.