Cdl Undertake Market Purchase Preference Shares Makes Offer 78 Cents Apiece
Real estate developer City Developments Limited (CDL) is looking to repurchase 10% of its preference shares, approximately 26.8 million shares, through an off-market equal access offer. The company is offering shareholders a price of 78 cents per preference share.
This decision follows the approval of a general mandate for the board to purchase non-redeemable convertible noncumulative preference shares at their Annual General Meeting on April 23.
Under the off-market offer, each preference shareholder can sell up to 10% of their shares held as of 5.30pm on June 2. If other shareholders do not accept their full entitlement, preference shareholders can also offer more than 10% of their shares for tender. However, the limit of 26.8 million shares still stands.
As of April 23, CDL has issued a total of 268.01 million preference shares. The offer will be open for acceptance for 10 calendar days, excluding public holidays, starting from May 23. Shareholders must make their decision by the June 2 deadline.
According to CDL, this off-market offer allows the company to have more control over its share capital related to its preference shares. It also confirms that they do not plan to convert the preference shares. The trading volume of CDL’s preference shares has been consistently low, with an average daily trading volume of around 3,333 shares for the past month, and 11,237, 8,796, and 8,571 shares traded during the three-month, six-month, and twelve-month periods respectively. These numbers represent less than 0.0042% of the total number of preference shares issued.
Payment for the repurchased preference shares will be made on June 10.
During the CDL’s AGM on April 23, CEO Sherman Kwek acknowledged that it was a good time to discuss share buybacks given the company’s share price levels at the time.
As of the end of their FY2024 on December 31, 2024, CDL’s net asset value (NAV) was $10.17 per share, while their revalued NAV (RNAV) was $17.57 per share, or $19.68 per share when considering fair value and all valuation surpluses on their portfolio. On April 23, their share price closed at $4.90, down 17.23% from the same time last year and 4.3% year-to-date.
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In March of 2024, CDL began a share buyback program for their ordinary shares through open market purchases. The company noted that their shares were trading well below their intrinsic value, despite having strong fundamentals. However, the buyback program ended three months later in June 2024. During this time, the company spent nearly $13 million purchasing its own shares.