Ichiban Boshi operator RE&S shares soar 32% a day after announcing privatisation offer
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RE&S operates Japanese F&B outlets in Singapore and Malaysia, including popular brands such as Kuriya Japanese Market and Gokoku bakeries.
PHOTO: RE&S ENTERPRISES
Tessa Oh
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SINGAPORE – Shares of Singapore-listed Japanese restaurant group RE&S Holdings soared on May 20, a day after it announced it had received a privatisation proposal from Euphoria Investments, a special purpose vehicle managed by private equity firm Southern Capital Group (SCG).
Shareholders who accept the offer can either opt for a cash payout of 36 cents a share, or a combination of 33 cents a share in cash and 0.083143 new share in the special purpose vehicle. The offer is made by way of a scheme of arrangement.
When the market reopened on May 20, RE&S shares shot up to trade near the offer price within a narrow band of 34 cents to 35 cents. They eventually settled at 35 cents at the market close for a 32.1 per cent gain on turnover of 589,000 units. This is also the highest close since the company’s initial public offering at 22 cents a share in November 2017.
RE&S operates Japanese food and beverage (F&B) outlets in Singapore and Malaysia, including popular brands such as Ichiban Boshi, Kuriya Japanese Market and Gokoku bakeries.
The offer represents a 56.5 per cent premium to the last traded price of 23 cents or 50 per cent to the three-month volume-weighted average price up to May 13.
It also represents a 45.2 per cent premium to the six-month volume-weighted average price up to May 13, and is priced at more than two times the company’s audited net asset value per share as at June 30, 2023.
In a statement, RE&S said Euphoria plans to leverage SCG’s expertise, resources and network to accelerate the F&B company’s growth trajectory, capitalise on emerging opportunities and strengthen its market position.
“The offeror believes that the privatisation of the company will provide the business with the necessary flexibility to focus on long-term execution whilst helping it save costs and resources associated with maintaining its listed status,” the company added.
It noted that the trading volume of the stock had been low for at least the past 12 months.
“The scheme therefore provides shareholders who find it difficult to exit the company as a result of the low trading volume of the shares with an opportunity to liquidate and realise their investment in the shares at a premium to the prevailing market prices which would otherwise not be available given the low trading liquidity,” RE&S said.
Major shareholders Hiroshi Tatara, Yek Hong Liat John, Foo Kah Lee and Lim Shyang Zheng have given an irrevocable undertaking to the offeror to vote in favour of the scheme at a forthcoming meeting. Their combined holdings represent about 84.1 per cent of all outstanding shares.
Mr Foo, who is also executive director and CEO of RE&S, said: “This is another significant milestone in the company’s development and growth trajectory, and our employees and staff will be further motivated by SCG’s compelling interest and participation.”
Euphoria Investments is an indirect wholly owned subsidiary of a fund that is advised and managed by SCG, a Singapore-headquartered private equity firm that focuses on investments into high-growth middle market businesses across South-east Asia.
Said SCG CEO Kenneth Tan: “We look forward to the opportunity of partnering with the company for its next phase of growth and are pleased to put forward this privatisation offer to shareholders that will allow an exit of their investment at an attractive price.” THE BUSINESS TIMES
