Buyout of SMRT by Temasek will make it a pseudo Government agency

SMRT Corp announced a continuation of its trading halt today (18 Jul) pending a possible announcement. SMRT first announced a trading halt on Jul 15, where it was announced that its operating assets will come under the new rail financing framework from Oct 1.

According to a Bloomberg report, SMRT called for a trading halt today because Temasek Holdings is mulling a buyout offer for the public transport operator. Temasek owns 54.2 percent of SMRT, and the sovereign wealth fund is said to be weighing an offer to buy all the shares it does not already own.

Temasek refused to comment on the report saying it “does not comment on market speculation and rumours”.

SMRT vice president for Corporate Information and Communications Patrick Nathan said it “does not comment on market speculation and rumours”.

It was announced on Friday (Jul 15) that SMRT’s operating assets will come under a new framework where the Land Transport Authority (LTA) will pay nearly S$1 billion for more than 60,000 SMRT assets.

Kien Lee, publisher of luxury and lifestyle magazine Senatus commenting on the possible buyout by Temasek in his Facebook said: “Temasek buying all the shares it doesn’t already own is effectively turning SMRT back into a “private” company (vs publicly-listed co with need to answer to public shareholders).”

Adding: “This also means it would become a pseudo-govt agency / national enterprise. Not that I don’t think it’s a good or bad move. But this kind of state intervention is probably only possible in China or Russia.”