Koufu founders to offer 77 cents per share to privatise company
Cash offer works out to a 15.8% premium over the counter's last traded price of 66.5 cents
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Koufu Group's founding shareholders will make an offer to privatise the company as the pandemic takes a toll on the home-grown foodcourt operator's business.
They plan to make a voluntary conditional offer for Koufu 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.
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 have 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 yesterday.
Privatising Koufu will allow for greater control and flexibility in deploying the group's resources, and implementing strategic initiatives and operational changes, it said.
It added that Covid-19 has had an unprecedented impact on 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 (Koufu'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 low trading volumes and the costs involved to stay listed 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 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 yesterday 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. They include mainboard-listed property developer SingHaiyi Group and property and hospitality group Roxy-Pacific. 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.