SINGAPORE (THE BUSINESS TIMES) – Jardine Matheson Holdings announced on Monday (March 8) it will simplify the parent company structure of the group by acquiring the 15 per cent of Jardine Strategic Holdings it does not already own. The acquisition is valued at approximately US$5.5 billion (S$7.4 billion).
Upon completion, Jardine Matheson will be the single holding company for all its Jardine subsidiaries, a move which the group said will result in a ” conventional ownership structure and a further increase in the group’s operational efficiency and financial flexibility”.
Jardine Strategic shareholders will be entitled to receive US$33 for each share that they own.
The acquisition price represents a 20.2 per cent premium to the last closing price of US$27.45 per Jardine Strategic share on March 5. The price is also at a 29 per cent and 40.3 per cent premium to the volume-weighted average closing price per share over the one-month and six-month period respectively ended March 5.
The acquisition is expected to become effective by the end of April 2021.
Further, Jardine Matheson said it intends to cancel the 59 per cent shareholding in Jardine Matheson held by Jardine Strategic through a reduction of capital at Jardine Matheson’s annual general meeting in 2022.
“The simplification of our ownership structure is a natural step in the evolution of the group and will create value for our shareholders,” said Ben Keswick, executive chairman of Jardine Matheson.
“Taking full ownership of Jardine Strategic is consistent with our policy of investing further in the growth prospects of our existing businesses and highlights the benefits of consistently maintaining the group’s financial strength.”
Both Jardine Matheson and Jardine Strategic will be announcing their FY2020 preliminary results on March 11. Jardine Matheson said it expects results “to be in line with market expectations, with full-year underlying net profit of US$1,085 million and underlying earnings per share of US$2.95”.
Jardine Matheson closed 30 US cents or 0.6 per cent lower at US$53.69 on Friday, while Jardine Strategic ended the day 35 US cents or 1.3 per cent higher at US$27.45.