Independent financial adviser KPMG Corporate Finance has backed the offer by Italian shipbuilder Fincantieri to take Vard Holdings private.
KPMG's letter to Vard's independent directors released yesterday noted that the offer was "fair and reasonable from a financial point of view". "Accordingly, we advise the independent directors to recommend to shareholders to accept the offer," it said. The offer closes at 5.30pm on Dec 29.
Fincantieri - the parent company and a 55.6 per cent stakeholder of Vard - said last month that it would buy the rest of the Singapore-listed firm that it does not already own, for up to $125.6 million. It is offering 24 cents per Vard share.
KPMG noted that the offer price represents a premium of about 11.63 per cent over the average price for the past month, 24.35 per cent above the share's three-month average and 29.73 per cent more than the six-month period, up to and including the last trading day.
"Amid challenging market conditions in the oil and gas industry, the offer therefore represents a cash exit opportunity for shareholders to liquidate their investment at a premium to the prevailing market prices, without incurring other brokerage and trading costs."
Fincantieri has said it will delist the offshore vessel builder if its offer, which is conditional upon it acquiring more than 90 per cent of the total shareholding, succeeds.
Norway-headquartered Vard has taken a hit amid the downturn in the offshore and marine sector and is moving to diversify the business.
The firm posted a net loss of 80 million Norwegian kroner (S$13.4 million) for the three months ended Sept 30, an improvement on the loss of 486 million kroner in the same period last year, amid restructuring efforts and rising orders.
Revenue fell 34 per cent to 1.5 billion kroner, largely because of reduced activity at its European yards and the closure of its Niteroi yard in Brazil during the quarter.
The proposed delisting of Vard, which has a market capitalisation of about $277.3 million, adds to a growing list of companies here that have received similar privatisation offers, including ARA Asset Management and instant coffee maker Super Group.
Osim International, Tiger Airways, SMRT Corporation, Eu Yan Sang and Neptune Orient Lines have already been taken off the local bourse.
Vard shares closed flat at 24 cents yesterday, after the announcement was made.