OSIM INTERNATIONAL LTD
O23.SI
OSIM International: Final unconditional offer price of S$1.39/share
- Ron Sim raises offer to $1.39
- Offer to close on 25 April 2016
- No further revisions to offer price
Revised unconditional offer to S$1.39/share
- Mr Ron Sim has revised his voluntary unconditional cash offer from S$1.32 to S$1.39 for all shares in the company. It is also stated that there will be no further revisions made to this final offer price.
- Shareholders who accept the offer will receive S$1.39/share, while those who receive the FY15 final dividend of S$0.02/share will get the adjusted S$1.37/share.
- As of the latest announcement on 5 April, the offeror and parties acting in concert with it hold ~69.36% of the issued shares.
- Mr Sim’s holdings needs to reach above 90% of the total number of issued shares (excluding any treasury shares) to trigger the compulsory acquisition level and delist the company as intended.
- The offer will now close on 25 April 2016, unless otherwise extended. As such, note that while there is a final day rule, whereby the offer will not be kept open after 530pm on the 60th day, the offeror may extend the offer beyond this period with SIC’s prior consent.
Took a cautious stance
- To recap, we took a cautious stance on the stock given the lack of visibility for earnings growth ahead.
- We note that it has been difficult for the company to ride on China’s progressive move to a consumption driven economy, while Singapore and Malaysia have been performing relatively weaker as well. Thus we became less compelled to view new flagship chair launches as significant growth drivers, and believe this core business segment no longer thrives easily vs. its earlier years.
- We acknowledge that TWG offers room for growth, especially in the longer term. The segment has been profitable in Singapore, but due to continued expansion plans, gestation costs would continue to drag profitability, adding pressure for management especially in the near term.
Accept the offer
- The final offer price of S$1.39 represents 20.5x FY15 P/E and 20.1x FY16F P/E, nearly 2 s.d. above its five year historical average.
- Given the change in outlook facing the core business as laid out above, we recommended shareholders to accept the offer.
- Note that another trading halt was requested yesterday evening.
Jodie Foo
OCBC Securities
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http://www.ocbcresearch.com/
2016-04-06
OCBC Securities
SGX Stock
Analyst Report
0.82
Same
0.82
