The voluntary general offer (VGO) of S$1.30/share made by CMA CGM for NOL was declared unconditional on 9 Jun after Temasek tendered its NOL shares representing ~66.8% stake in acceptance of the VGO.

According to SGX rules, shares of NOL will be suspended for trading when public float falls below 10%, and CMA CGM intends to delist NOL.

Based on the offer, CMA CGM’s right for compulsory acquisition will be triggered only when it acquires not less than 90% of the total issued NOL shares other than those it already owns as at date of offer (i.e. 10.5%).

Therefore, if CMA CGM total stake in NOL crosses above ~91.1%, it will exercise its right to compulsorily acquire all the remaining NOL shares from shareholders who have not accepted the offer.

However, it is possible that shareholders who did not accept the offer may end up with shares of suspended/delisted NOL, if CMA CGM stake is above 90.0% but below 91.1%.

Hence, in view of these factors, we recommend investors to ACCEPT THE OFFER. As of 16 Jun, CMA CGM owns 85.8% stake in NOL, with the offer due to close on 18 Jul 16.

Source: OCBC Research - 17 Jun 2016