‘Not fair and not reasonable’: IFA recommends Cordlife shareholders reject Thai firm’s partial offer
Sign up now: Get ST's newsletters delivered to your inbox
In the event that its offer is successful, Medeze Group, which already has 0.68 per cent of Cordlife, will own a 10.68 per cent stake in the company.
PHOTO: ST FILE
Follow topic:
SINGAPORE – The independent financial adviser (IFA) assessing the offer to acquire a stake in Cordlife Group has concluded that the offer is unfair and unreasonable, and has recommended that shareholders reject it.
Thailand’s Medeze Group, which is among South-east Asia’s largest stem cell storage and services providers, on May 13 announced plans to acquire a 10 per cent stake in Cordlife,
If the offer is successful, Medeze Group, which already has 0.68 per cent of Cordlife, will own a 10.68 per cent stake in the company.
However, Novus Corporate Finance, the IFA for the partial offer to acquire a 10 per cent stake in Cordlife Group, said on June 11 that the offer price represents a discount to the volume-weighted average price of the shares after the last trading day and up to the latest practicable date.
It also noted that the offer price represents a discount to the closing price of the shares as at the latest practicable date.
The IFA further added that the offer price represents a discount to the net asset value and net tangible asset per share as at Dec 31, 2024.
The offer price is also lower than the estimated fair value range of 47.8 cents to 58.8 cents for each share.
As a result, the IFA has advised the recommending directors to recommend that shareholders do not accept the partial offer.
The Securities Investors Association (Singapore), or Sias, said that it is important for shareholders to note that the offer by Medeze is a partial offer for only 10 per cent of Cordlife’s shares.
“This is very distinct from a delisting offer or going private offer. So there is no risk that the company will be delisted as a result of Medeze’s offer.
“The shares will remain listed and tradeable on SGX regardless of the outcome, preserving liquidity and allowing shareholders to continue trading based on their independent views,” Sias told The Straits Times.
Sias said that shareholders who view the Medeze offer as favourable can choose to tender their shares, while those who believe that Cordlife is undervalued may choose to hold or even accumulate more.
The partial offer from Medeze comes after Cordlife’s cord blood banking service and human tissue banking service licences were renewed by the Ministry of Health (MOH) for a year from Jan 14.
MOH audits showed that Cordlife has satisfactorily addressed critical shortcomings in various areas, including temperature monitoring practices, cord blood inventory management and incident response.
This followed a 9½-month suspension of Cordlife’s operations from December 2023 to mid-September 2024, due to lapses in the storage of its cord blood units that damaged the cord blood units belonging to at least 2,150 clients and rendered them unsuitable for stem cell transplant purposes.
Cordlife was later permitted to resume operations in a controlled and restricted manner from Sept 15, 2024, to Jan 13, before its licences were renewed on Jan 14.
Sias noted that the reputational damage that Cordlife suffered is significant and management has been trying to restore customers’ trust.
Sias added that it hopes Cordlife’s significant shareholders, including Medeze if they are successful in their partial offer, work together to restore the group’s credibility and unlock long-term shareholder value.
Cordlife posted a net loss of $18.7 million in 2024, from a net profit of $3.6 million a year earlier. This significant drop is primarily attributed to a 50 per cent decline in revenue to $27.8 million, largely due to the suspension of operations in Singapore for more than nine months.
Shares of Cordlife closed flat on June 12 at 28 cents. They are up by about 80 per cent since the offer was announced.
