In response to a longstanding MAS diktat that Singapore's banks must dispose of their non-core holdings, OCBC is to sell its 38.4% stake in listed retailer, Robinson & Co. The stake is held jointly with its insurance affiliate, Great Eastern and represents the controlling stake in the retailer which was established in 1858.
Meanwhile the board of Robinson & Co have appointed ING to advise on the sale of the whole company, a move which may see the company delisted. Among those who look to be interested in buying the premier Singapore retailer are Japanese firms, Seibu, Isetan and Sogo as well as venture capitalists.
The company owns the upmarket Robinson department stores in Singapore as well as the chain, John Little & sons and the Marks & Spencer franchise for Singapore and Malaysia. The directors of the company are thought to be keen to find a buyer who will protect the brand value and ethics of the retailer and accordingly they are not simply looking for the highest price.
The company, whose CEO is the Dane, Peter Husum, also has substantial ownership by Aberdeen Asset Management (11%) and Silchester Investments (9%). The company has a market capitalization of S$593 million but is sitting on a book value of cash and investments of S$337 million.
It is therefore thought that bidders will pay a minimum of S$256 million and that the bids will probably exceed S$300 million. The plan is for the cash and investments to be returned to existing shareholders.
In a city where backdoor listings have a price, it will interesting to see whether the listing itself adds any value. Controlling shareholder, OCBC hopes to have the sale completed within six months. After it disposes of Robinson its only other major non-core asset will be conglomerate, Straits Trading Co.
The MAS dikat means it will also have to sell that within two years too.