The Tang brothers: Wee Sung and Wee Kit have responded to yesterday’s press articles on the petition to the MAS signed by 10 dissenting minority shareholders of CK Tang, with the tacit support of the SIAS, as follows:

Comparisons with The ION (owned by CapitaLand and Sun Hung Kai and land cost alone of $1.38 bln) and Wheelock Place (owned by Wheelock Properties and valued at $740 mln) are inappropriate as the former 2 have significantly larger built up areas. And more importantly, under Rule 26.2 (a) of the Singapore Takeover Code, a property which is occupied for purposes of the business must be valued at open market value for existing use. In other words, valuing the space at $340 mln based on the “existing use ” method meets with the statutory requirement.

They have no plans currently to discontinue the retail operations of CK Tang in its Orchard Road premises, nor do they intend to dispose of or redevelop these premises, which cover 17,769 sq meters strata floor area, representing 28.3% of Tang Plaza, which is owned by the Tang brothers.

Our stance remains that minority shareholders who believe CK Tang is undervalued at 83 cents per share vs last book NAV of 93 cents, can always choose to remain as shareholders of the company, even if the brothers succeed in pushing the delisting proposal through the EGM on Friday July 17th, given they own just over 87% of CK Tang’s issued capital, (ie the stock gets delisted from SGX) and continue to bet that the “true value” of CK Tang will eventually be realized, like when the Tang brothers decide to discontinue the retail operations / dispose of or redevelop the property.