SINGAPORE - An investment vehicle owned by the top executives at Singapore Medical Group (SMG) has launched an offer to take the company private at 37 cents per share in cash or one new share in the offeror.
Called TLW Success, the vehicle is equally owned by SMG's non-executive chairman Tony Tan Choon Keat, chief executive Beng Teck Liang and executive director Wong Seng Weng, the company announced in a filing on Tuesday.
The 37 cents cash price represents a premium of 18 per cent over SMG's volume-weighted average price in the past 12 months. It is also 8.1 per cent above the company's net asset value per share as at end-2021.
To date, TLW has received irrevocable undertakings from shareholders, including the three executives behind the offer, holding 51.67 per cent of the company to accept the share alternative of the offer.
The offer is conditional upon TLW and its concert parties holding more than 90 per cent of the company at the offer's close. TLW intends to make SMG its wholly owned subsidiary and does not plan to retain its listing status.
The move comes as SMG faces headwinds including operational cost increases, a shortage of skilled healthcare labour and wage increases in the midst of an inflationary environment, the company noted in its announcement.
The privatisation will provide SMG with greater flexibility to execute long-term investments and enhance shareholder value in the long run, said Dr Beng in a press statement.
He said: "The offer will effectively allow shareholders to exit at an attractive price while welcoming longer-term oriented shareholders who believe in the company's growth prospects to remain invested in the unlisted entity."
"The company's relatively subdued share price performance over the past three years has also constrained its ability to execute inorganic growth initiatives and build upon its track record of growth through acquisitions. Delisting at a time of increased uncertainty will allow the organisation to be more nimble and enable more aggressive strategies for growth," he added.
Trading in shares of SMG has been halted since Sept 9. THE BUSINESS TIMES