Semb Corp - Not too bad today

It plunged after lunch and managed to recover strongly.

This will be my 52th attempt to squeeze some milk out of this mistress. Don't let me wait too long.

Cascal board director quits amid Sembcorp takeover bid

By CONRAD TAN

CASCAL, a New York-listed water company that has sued Sembcorp Industries to prevent a hostile takeover, said that its spokesman Michael Wager has resigned from its board.

Mr Wager, a non-executive director of Cascal since 2008, will take on an advisory and spokesman role for the company as it fends off Sembcorp's offer to buy out its shareholders, Cascal said yesterday.

Mr Wager's resignation is the latest twist in Sembcorp's attempt to take over Cascal, after Sembcorp struck a deal with Cascal's biggest shareholder Biwater Investments to acquire its 58.4 per cent stake in Cascal.

Cascal's board is split - its chairman Adrian White controls Biwater, which has agreed to sell its stake in Cascal to Sembcorp, even at less than the market price of Cascal shares.

Last Friday, Cascal filed a suit in New York against Sembcorp and its subsidiary Sembcorp Utilities, claiming violations of US securities laws and breach of confidentiality agreements.

Cascal says that it has been harmed by the plunge in its share price after Sembcorp's offer, and what it claims to be the improper use of its confidential information. It is seeking unspecified damages, and a court order to stop a takeover by Sembcorp.

The suit also names Biwater Investments and Biwater Holdings, the parent company of Biwater Group, as defendants.

Sembcorp denies Cascal's claims. It has said that it is not in breach of any laws, regulations or contractual obligations in relation to its offer to buy out Cascal's shareholders, and has hired lawyers in the US to defend itself against Cascal's suit.

In its complaint, Cascal said that it agreed on Nov 9 last year - at Biwater's request to explore a sale of its stake in Cascal - to divulge confidential information to prospective buyers, including Sembcorp.

To prevent misuse of that information, all parties agreed to a standstill period during which a prospective buyer of Biwater's Cascal shares could not enter into other deals involving Cascal shares, with certain exceptions. One exception allowed prospective buyers to offer to buy out all Cascal shareholders - but only if the offer was on the same terms to all shareholders, Cascal said.

It argues that because Biwater has now agreed to sell its stake to Sembcorp regardless of whether other Cascal shareholders take up Sembcorp's offer, 'the terms of the offer made to Biwater were not the same as those made to Cascal's public shareholders' and that Biwater and Sembcorp have breached the agreement.

Cascal also argues that Sembcorp's offer price of US$6.75 per share to its shareholders - which falls to US$6.40 if it secures less than 80 per cent of Cascal shares - would be 'substantially higher if Biwater had undertaken a fair and open process' instead of striking a deal directly with Sembcorp, 'making an attempt to secure competitive bids or pricing futile'.