LIM & TAN

Daily Review

SINGAPORE COMPUTER SYSTEMS

Realistically Speaking

�� Sing Tel has, through 100%-owned National Computer Systems (NCS), emerged as the buyer of Temasek / Green Dot’s entire 60% stake (93,144,501 shares) in SCS, at $1.50 per share.  Rationale of the acquisition: “it accelerates the overseas expansion plans of NCS by providing operational scale and an enlarged regional footprint”.

�� NCS will make a mandatory conditional offer for the remaining 61,899,110 shares (39.9%), at $1.50 each. The only condition of the offer is that the “Competition Commission of Singapore will not (i) refer the proposed acquisition to a more detailed assessment pursuant to the CCS Guidelines on Merger Procedures, or (ii) issue a direction that will prohibit the offeror from acquiring voting rights of SCS. (The offer will not be conditional on a minimum number of acceptances being received by the offeror.)

�� Sing Tel will exercise its right of compulsory acquisition in the event it becomes entitled to do so (ie crossing the 90% acceptances), and de-list SCS from the SGX.

�� Green Dot had on July 30th said it was evaluating its 60% stake in SCS, as it had with its 54% stake in SNP on Apr 18th, and which resulted in a bid 7 weeks later. SCS closed at 96 cents on July 29th. By Aug 22nd, prior to the above news, SCS had risen to $1.31.

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COMMENTSNCS has said it “does not intend to revise the offer price”.

1. That the buyer of Temasek’s stake turns out to be Sing Tel / NCS is not a great surprise, given that SCS does a fair bit of government business and best to be acquired by a local company.

2. The Offer price is “disappointing” when compared to the valuation for

3. While the offer documents are still in the works, we are however inclined to accept Sing Tel / NCS’ $1.50 offer for the following reasons:

- the Offeror has already indicated it

- with 60% now in Sing Tel’s hands, there will not be a competing offer;