Southeast Group (SEG), a holding company controlled by tycoon Charoen Sirivadhanabhakdi, has struck a deal to amalgamate with Thai Insurance Plc (TIC), a move to pave the way for the group to have a backdoor listing on the Thai stock market.
Under the deal, SEG or any person assigned by SEG will arrange the conditional voluntary tender offer for TIC's shares as an alternative for those who want to exit, while a holding company, Thai Group Holdings Plc (HoldCo), which will be incorporated by TIC's 15 shareholders and or directors, will allocate 730 million shares at a price of 34.24 each, worth 25 billion baht in total, to SEG in return for the group's assets and liabilities. Another 23.5 million shares are in exchange for TIC's shares, TIC said in a filing to the Stock Exchange of Thailand (SET).
Upon completion of the newly issued share offering, SEG will hold at least 96.9% in HoldCo, depending on how many TIC shareholders exit, with TIC's shareholders making up the rest. HoldCo will hold up to 100% in TIC as well as SEG's entire assets and liabilities.
Assets owned by SEG comprise Southeast Life Insurance Plc (SELIC), Southeast Insurance Plc (SEIC), and another 10 companies including Southeast Capital Co, Asiatique House Co, Dhipaya Insurance Co (Laos) and TCC Privilege Card Co.
SEG's shareholders are Southeast Group International Ltd at 49%, while Mr Charoen and his wife Wanna Sirivadhanabhakdi hold 25.5% each. TIC's five major shareholders are Paisit Tuchinda (21.2%), Pairoh Tuchinda (17.9%), Thaweerat Prungpattanasakul (12.8%), Office of the Privy Purse (4.85%) and Danu Thai Holding (3.75%)
TIC expects HoldCo to complete the allocation of newly issued ordinary shares to SEG by the first quarter of next year.
However, the business alliance with SEG is subject to at least ¾ of TIC's shareholders attending the meeting and having the rights to vote.
After the share offering is completed, TIC will de-list its shares from the SET and HoldCo will apply to list on the Thai bourse.
The listing of HoldCo requires votes of at least ¾ of TIC's issued shares.
The deal is expected to create economies of scale, reduce operating costs and allow HoldCo to expand into more varied businesses including life insurance, non-life insurance and leasing, a wider range of products to meet customers' needs.
"After the entire business transfer, HoldCo will be significantly larger and the main income should come from life insurance business, which has the potential to generate high returns," said TIC in its filing to the SET.
