Sias raps Singapore Paincare for WhatsApp pressure on shareholders over privatisation offer

[SINGAPORE] The Securities Investors Association (Singapore), or Sias, is cautioning shareholders of Singapore Paincare to decide on its proposed privatisation offer by reading the independent financial adviser (IFA) report.

In May, the Catalist-listed medical-services company received an acquisition bid of S$0.16 per share from Advance Bridge Healthcare, a healthcare management consultancy. This was 27 per cent below its initial public offering price of S$0.22 per share in 2020. The counter was last traded at S$0.14 before the offer was announced.

On Wednesday (Aug 27), Sias called for the upcoming scheme meeting, where shareholders are to vote on the privatisation via a scheme of arrangement on Thursday, to be postponed. It also asked shareholders to resubmit their proxy forms.

“This will ensure fair treatment for all shareholders,” the association said.

The move follows concerns over two WhatsApp messages sent to shareholders ahead of the meeting – one on Aug 16 summarising the offer and encouraging support for the delisting, and another on Aug 21 reminding them of the proxy form deadline.

Both were signed by Singapore Paincare chief executive officer Bernard Lee, and chief operating officer Jeffrey Loh.

Sias noted that such communication is a breach of rule 8.6 of the code on takeovers and mergers. The code states that, except with the Securities Industry Council’s (SIC) consent, campaigns involving direct shareholder contact can be conducted only by financial adviser staff familiar with the code’s requirements.

Given that the messages were sent before proxy submissions closed, Sias questioned the accuracy and fairness of the decision made by some of the shareholders who may have been influenced by its content.

“Shareholders of Singapore Paincare should not be pressured by the WhatsApp messages or any other form of contact,” it added.

“Disregard and ignore”

Sias was referring to a joint announcement issued by Singapore Paincare and Advance Bridge Healthcare on Aug 25, asking shareholders to “disregard and ignore” the earlier WhatsApp messages as they were sent without the consent of the SIC.

Their boards noted that the messages had urged shareholders to “take a certain course of action to facilitate the scheme and highlighted only certain information in relation to (its) merits”.

They also pointed out that Dr Lee and Dr Loh have a conflict of interest, as both are major shareholders of the offeror and senior executives of the company. The SIC had exempted them from giving any recommendations on the scheme, meaning they should not have signed the messages.

The announcement advised shareholders to rely on the official scheme document, including the recommendations of the non-conflicted directors and IFA report.

The IFA report, issued on Aug 13, stated that the offer is “fair and reasonable” and pointed out that the offeror does not intend to increase the S$0.16 cash per scheme share.

In June, Sias had advised Singapore Paincare shareholders to exercise caution and wait for the IFA report before making any decisions. At that time, the association also highlighted that the company could be valued at up to S$0.37 per share, more than double the proposed privatisation price.

On Wednesday morning, Singapore Paincare requested a trading halt, with no further details provided. Its shares last traded on Tuesday at S$0.158.