Oei to keep NatSteel stake despite defeat

  • Business
  • Thursday, 16 Jan 2003

SINGAPORE: Indonesia-born tycoon Oei Hong Leong plans to stay on as NatSteel Ltd’s largest shareholder, despite losing a bruising takeover battle to hotel magnate Ong Beng Seng for the cash-rich steel miller. 

Oei, who has spent S$227mil for a near-30% stake in NatSteel, said in a statement yesterday he would not accept Ong’s offer of S$2.06 a share for the company.  

He added that he had met with the head of the Securities Investors Association of Singapore, David Gerald, on issues relating to minority shareholders’ rights. 

Analysts said the move suggested that Oei, who until recently looked like he could scupper Ong’s bid, would continue to push NatSteel to distribute its S$600mil cash pile equivalent to S$1.55 a share -- a proposal he made last month to the steel firm. 

NatSteel's management, supported by Ong’s takeover consortium 98 Holdings Pte Ltd, has so far rejected Oei's demand and offered instead a smaller payout of 97 cents a share on the grounds that a larger payment would affect its ability to operate as a company. 

“It looks like Oei is going to try and get his dividend. He is already going to get back half of his money in dividends but I think he wants more,” said a director with a Singapore brokerage. 

Oei, who has also asked for 9 board seats and NatSteel to develop its China business, where it already has 3 profitable steel mills, was not immediately available for comment. 

“He can continue to make his demands and we will look into them,” David Ban, director of 98 Holdings and Ong’s right-hand man, said in an interview. “We have no interest in sinking the ship. We are majority shareholders but we are also practical businessmen. Whatever he wants, whether it is S$1.55 or S$2.50, it is not an issue if the company can afford to give it.”  

Ban also said his view was that Oei would probably align his interests with that of 98 Holdings, which now holds 50.31% of NatSteel, after the takeover. 

“It is implicit that he wants to work with the majority shareholders. If he doesn’t want to work with us, he will sell his stake,” Ban said. 

On the issue of board representation for Oei, Ban said the board would probably consider the request though he did not think a large board would be in the interest of NatSteel. – Reuters  

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