Board of Cascal withdraw its recommendation to reject Sembcorp's offer

By Mok Fei Fei

Posted: 05 July 2010 1302 hrs

SINGAPORE: Conglomerate Sembcorp Industries said on Monday that the board of its takeover target, Cascal, has withdrawn its recommendation to reject its offer.

Previously, the board of US-listed Dutch water firm Cascal told shareholders to reject Sembcorp's offer and not tender their shares in the offer.

The board has now expressed no opinion in the matter and remains neutral about the offer.

It changed its recommendation given Sembcorp's intention to delist Cascal from the New York Stock Exchange.

Given that proposal, Cascal's board said there is a substantial likelihood that no active trading market will exist for the shares.

As such, shareholders may not be able to realise value for their shares, in the short term or long term that is comparable to the Sembcorp offer.

All of Cascal's directors and executive officers have indicated that they intend to tender all of their shares for purchase pursuant to the Offer.

Sembcorp adds that 25,722,459 Cascal shares have been tendered into and not withdrawn from its Offer.

This represents about 83.6 per cent of the outstanding Cascal shares.

Sembcorp first announced that it would be acquiring Cascal in April after negotiating a private deal with Britain's Biwater Investments to buy its entire 58.4 per cent stake in Cascal.

It then offered to buy all the remaining shares of Cascal that it does not own.

The offer and withdrawal rights are scheduled to expire at 5pm New York time on July 8. - CNA/vm