SINGAPORE (THE BUSINESS TIMES) - Mr Koh Wee Meng, the founder, executive chairman and chief executive of property developer Fragrance Group, is offering to take the company private.
Mr Koh, through JK Global Treasures, intends to make a voluntary conditional cash offer for all the issued and paid-up ordinary shares of the group at 13.8 cents per share, Fragrance announced on Friday (July 9).
Catalist-listed Fragrance shares last closed on Thursday at 11.8 cents, with a market capitalisation of $793 million.
JK Global Treasures and parties acting in concert with it currently hold 5.76 billion shares in Fragrance, representing an 85.8 per cent stake in the company.
Mr Koh, who is JK Global Treasures' sole shareholder and director, currently owns 74.7 per cent of Fragrance shares, while his wife Lim Wan Looi, an executive director of Fragrance, owns a 10.9 per cent stake in the company. They have provided an irrevocable undertaking to tender all of their respective shares in acceptance of the offer.
The offer price of 13.8 cents a share exceeds Fragrance's last traded price on July 8 on the Singapore Exchange (SGX) of 11.8 cents, representing a 16.9 per cent premium. It also represents premiums of 19 per cent over the one-month and three-month volume-weighted average price per share, 20 per cent (six-month) and 21.1 per cent (12-month).
DBS Bank, acting as the financial adviser to JK Global Treasures, noted in a bourse filing that the offer was an "opportunity for shareholders to realise their investment at a premium without incurring brokerage fees".
"(The offer) represents a unique cash exit opportunity for shareholders to liquidate and realise their entire investment at a premium to the prevailing market prices and free of brokerage costs, being an option which may not otherwise be readily available due to the low trading liquidity of Fragrance shares," DBS said.
The company had an average daily trading volume of 0.002 per cent for the one-month, three-month, six-month and 12-month periods.
The offeror, with an intention to privatise the company, expects that Fragrance will not need access to the Singapore equity capital markets to finance its operations in the foreseeable future, hence it "does not believe it is necessary for the company to maintain a listing on the SGX".
As Mr Koh, who holds more than 50 per cent of Fragrance's shares, has undertaken to accept the offer, no other general offer will be capable of turning unconditional or succeeding, DBS said.
It added that JK Global Treasures believes that privatising the company will "provide the offeror with more flexibility to manage the business of the company and its subsidiaries, optimise the use of its management and resources and facilitate the implementation of any operational change".