Japanese electronics retailer Nojima Corp is making a bid for Courts Asia at 20.5 cents per share as it seeks to gain a strong foothold in South-east Asia.
The offer price represents a premium of about 35 per cent above Singapore company Courts' closing price on Wednesday. Courts shares closed at 15.2 cents on Thursday.
Trading in Courts shares was halted before the market opened yesterday, but its stock price has been on a tear since the trading halt was lifted after the midday break.
Shares closed at 20 cents on Friday. The counter, which averaged a turnover of 255,000 shares over the last 15 trading days, saw comparatively heavy trading, with 1.59 million shares changing hands.
The offer is conditional upon unit Nojima Asia Pacific having received by the close of the offer sufficient valid acceptances that, together with the shares owned by Nojima and any parties acting in concert with it, result in more than 50 per cent of the shares in issue and outstanding.
Nojima has received an undertaking from Courts' majority shareholder Singapore Retail Group (SRG), which has agreed to irrevocably tender all its 382 million shares, translating to a 73.8 per cent stake in the company.
Once SRG accepts it, the offer will turn unconditional.
Courts Asia, the holding company for Courts operations in Singapore, Malaysia and Indonesia, has been listed on Singapore's mainboard since 2012. With its roots as a furniture retailer from Britain, Courts opened its first store in Singapore in 1974, mainly selling furniture. Today, it has around 80 stores across its three markets and has expanded its range to include electrical, IT and furniture products.
Tokyo Stock Exchange-listed Nojima is an electrical appliance retail chain mainly selling consumer digital appliances, and has a global headcount of over 8,000 staff. It has a market capitalisation of $1.4 billion and earned revenues of $6.1 billion for the financial year ended last March.
After the offer is completed, Nojima may undertake a "strategic and operational review of Courts, with a view to realising synergies, economies of scale, cost efficiencies and growth potential", it said. It will also consider delisting Courts from the Singapore Exchange if it gets enough acceptances to do so.
Nojima said synergies can be created between the two retail groups.
It also highlighted that shareholders can use the offer as an exit opportunity: "The closing price of the shares has not been at or above the offer price since July 27, 2018."
Courts posted a net loss of $3.1 million for its fiscal second quarter, from a net profit of $1.5 million for the same period a year earlier.
Courts announced on Tuesday it will close one of its Indonesian megastores in Tangerang as it was historically not profitable, and to avoid high rental costs over the remaining lease term. It also bought a property in Jakarta for $9.36 million and said it will restructure its megastore there.