Osim founder sweetens offer to buy out company

Home-grown company Osim listed on the Singapore Exchange in 2000, and is famous for its massage chairs (above).
Home-grown company Osim listed on the Singapore Exchange in 2000, and is famous for its massage chairs (above).PHOTO: OSIM
Founder and chief executive Ron Sim (above) controls 69.36 per cent of Osim.
Founder and chief executive Ron Sim (above) controls 69.36 per cent of Osim.PHOTO: OSIM

Stock closes higher after revised offer of $1.39 made by Ron Sim's private investment vehicle

Osim International shares rose yesterday after news that its founder has raised his offer to buy out the lifestyle firm.

The stock rose about 3 per cent to $1.395 before closing at $1.37, up 1.5 cents or 1.11 per cent, after the firm called for a trading halt at 4.48pm, citing a pending announcement.

Earlier, a private investment vehicle of Osim founder and chief executive Ron Sim said it is increasing the offer price to $1.39 a share from $1.32 on March 7, when the offer was first announced.

The revised price will see Mr Sim shelling out as much as $326.7 million in an unconditional cash offer for the firm. According to the stock exchange filing, Mr Sim controls 69.36 per cent of Osim.

Mr Sim intends to delist and privatise Osim once his investment vehicle Vision Three acquires 90 per cent or more of the shares.

Vision Three added that the new offer - which closes on April 25 unless extended - is final and will be extended to shareholders who have already accepted the earlier offer.

The $1.39 offer price represents a premium of about 40.6 per cent to the volume-weighted average price over the three months to Feb 29.

"The final offer price implies a price-to-earnings ratio for the company of 20.5 times, based on the earnings per share of $0.0679 for the financial year ending Dec 31, 2015," Vision Three noted in the statement.

Osim, a home-grown company listed on the Singapore Exchange in July 2000, is famous for its massage chairs. It also distributes health supplements under the GNC and RichLife stores and owns tea brand TWG.

Shareholders who accept the offer will receive an amount adjusted to reflect whether they have received the final dividend of $0.02 a share for the 2015 financial year.

Vision Three said shareholders who did not receive the dividend will get $1.39 a share, while those who got the dividend will receive $1.37 a share.

"We recommend shareholders to accept the offer, as we keep to our view that the offer is reasonable... The stock lacks strong drivers for earnings growth," said OCBC Investment Research analyst Jodie Foo yesterday.

However, veteran investor Mano Sabnani, who owns 20,000 Osim shares, is not planning to take up the offer.

"I think the company has good potential, and the revised price is still low. I don't think they will get the 90 per cent threshold at $1.39 per share. Tactically, I may sell them in the market if the share price is higher," he told The Straits Times yesterday.

A version of this article appeared in the print edition of The Straits Times on April 06, 2016, with the headline 'Osim founder sweetens offer to buy out company'. Print Edition | Subscribe