THIS column said last week that OCBC had three options to address the undervaluation of Great Eastern’s shares: it could organise a sale of the insurer, distribute a major portion of its stake to its own shareholders, or try once more to buy out all the insurer’s minority shareholders.
On Friday (May 10), OCBC unveiled a voluntary unconditional cash offer for all the shares it does not already own in Great Eastern, at S$25.60 per share.
This option hews closely to the bank’s longstanding narrative about Great Eastern being a strategic pillar of the group. In the short term, however, it may accentuate the fundamental misalignment of interest between OCBC and Great Eastern’s minority shareholders.
