SINGAPORE - Koufu Group's founding shareholders will make an offer to privatise the company for reasons such as greater management flexibility, as the pandemic takes a toll on the home-grown foodcourt operator's business.
The offeror, Dominus Capital, plans to make a voluntary conditional offer for Koufu Group at 77 cents per share in cash - a move that values the group at $425.8 million.
This represents a premium of 15.8 per cent over the last traded price per share on Tuesday (Dec 28), and 14.4 per cent, 13.6 per cent, 15.1 per cent and 15.3 per cent over the volume-weighted average price per share for the one, three, six and 12 months respectively up to and including Dec 28.
The offer presents shareholders with a clean cash exit opportunity to realise their investment, said Dominus Capital, an investment holding company incorporated on Oct 7 by Koufu's executive chairman and chief executive Pang Lim and his wife, executive director Ng Hoon Tien.
The duo has a deemed interest in 77.41 per cent of Koufu's shares through Jun Yuan Holdings, which has given an irrevocable undertaking to tender all its shares in acceptance of the offer, Dominus said in a bourse filing on Wednesday.
Privatising Koufu will allow for greater control and flexibility in deploying the group's resources, and implementing strategic initiatives and operational changes, said Dominus.
It added that the Covid-19 pandemic has had an unprecedented impact on the global economy and the group's business operations and financial performance amid factors such as restrictions on dining in and reduced capacity at malls.
"While the gradual relaxation of these restrictions may help the offeree group's business operations improve progressively... the (group) needs to stay vigilant and adaptable in the event of any new and additional regulations to address the spread of the virus and (its) mutations," said Dominus.
It cited a generally low trading volume, and additional compliance and associated costs from maintaining Koufu's listing status, as other reasons for taking the group private.
It also noted that the company has not raised equity capital since its debut on the Singapore Exchange's mainboard in 2018.
Koufu Group operates or manages 53 foodcourts, including three in Macau, 19 coffee shops and Punggol Plaza mall.
It also operates food and beverage businesses in Singapore, Macau, Malaysia, the Philippines and Indonesia. Its brands include bubble tea chain R&B Tea and traditional snacks chain Dough Culture.
The group called for a trading halt on Wednesday morning before the announcement. Its shares closed at 66.5 cents on Tuesday, down 1.5 per cent.
Koufu joins several companies that have recently announced plans to go private.
Mainboard-listed property developer SingHaiyi Group said earlier this month that it will be delisted, after its controlling shareholders' voluntary unconditional cash offer secured 95.8 per cent valid acceptances.
Property and hospitality group Roxy-Pacific also received an offer this month to privatise the company from a consortium including its executive chairman and chief executive Teo Hong Lim.
Meanwhile, Keppel Corp and Cuscaden Peak - a consortium led by property tycoon Ong Beng Seng - are locked in a battle for Singapore Press Holdings, which has parted with its media business. Cuscaden is seemingly poised for victory with a $3.9 billion bid.
