SINGAPORE - One of Singapore's most successful entrepreneurs hopes to take advantage of recent share price weakness to buy out minority investors and delist his company OSIM International, which sells massage chairs and luxury tea across Asia.
Ron Sim has made a bid for the 32 per cent of the company he does not already own after a series of poor quarterly results, affected by headwinds in China, one of OSIM's main markets. Displeased at how the market is valuing his company, Sim believes delisting could give him more freedom to boost growth.
Sim, who also serves as OSIM's chairman, is offering S$1.32 per share to minority stakeholders. That represents an 18.9 per cent premium over the last traded price and a 33.5 per cent premium over the volume weighted average price in the three months to Feb. 29.
OSIM's share price shot up above the offer price on the news, moving as high as S$1.395 on March 8 as the market adopted a wait-and-see attitude to Sim's offer. Jodie Foo, an analyst at OCBC research, described Sim's offer as reasonable. She recommended shareholders accept the offer "given the tough environment ahead and the lack of strong drivers for earnings."
A second analyst, Soh Lin Sin at Phillip Capital, noted that OSIM's three biggest shareholders after Sim -- Capital Group, Morgan Stanley and Macquarie Group -- held a combined 9.68 per cent. "If they jointly rejected the takeover offer, it is highly likely that Ron Sim's plan to delist the company could be blocked", she said.
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