The buyout saga surrounding Osim International is drawing to a close ahead of today's offer deadline, with chief executive Ron Sim on the cusp of garnering enough shares to privatise the company.
At the last update on Wednesday, Vision Three - the vehicle Mr Sim is using for the bid - had acquired 88.84 per cent of the issued shares.
Under the Companies Act, 90 per cent or more will give Mr Sim the right to compulsorily buy all remaining shares before delisting Osim.
Mr Sim launched a bid late last month to take the massage chair retailer private with an initial offer of $1.32 per share that was later raised twice to $1.39 after a trading bungle.
Reaching 90 per cent by the buyout offer's closing at 5.30pm today is as good as done, Voyage Research chief executive Roger Tan said.
"I think shareholders see it as a fair deal after all, given that Osim's growth outlook isn't very enticing. If you look ahead, the retail industry is going through a challenging time," he told The Straits Times.
"In China, its key market, Osim is also facing very tough competition over a product that really doesn't have a lot of room for differentiation."
In the three months to March 31, Osim's sales slid 8 per cent year on year to $138 million. This followed a 10.3 per cent drop in 2015 full-year revenue to $620 million. Net profit was $8 million in the first quarter, down 42 per cent from a year ago.
Osim is best known for its massage chairs, but it also distributes health supplements at GNC and RichLife stores. The group also owns tea brand TWG.
As business headwinds persist, the group has reduced Osim's own outlets from 560 a year ago to 516 as at the end of the first quarter, while TWG outlets grew from 44 to 52.
These figures have led analysts including OCBC analyst Jodie Foo to urge shareholders to accept the buyout offer.
"We believe the core business segment is facing growth challenges and can no longer thrive as easily as in the past. While TWG offers room for growth in the longer term, the group is still seeing start-up and operational cost pressures from this segment," she said.
It is likely that Mr Sim wants to shift his focus to the food and beverage segment under TWG, Voyage's Mr Tan said.
"I think he's still seeing growth potential there, and is trying to take full control to implement the strategies to grow and compete against the F&B big boys. If that succeeds, I won't be surprised if Osim comes back to get listed again, either here or in Hong Kong," he said.
But there are others who don't fancy the offer. A fund manager, who declined to be named, believes the sellers did not think long-term.
"Osim's core franchise is in an enviable market position, with a brand that has the biggest mindshare and market share in Asia. Some lifestyle-focused funds, such as L Capital, will gladly pay a lot of goodwill for Osim," he said.
Osim shares closed flat yesterday at $1.39.