SINGAPORE -OSIM International founder Ron Sim's S$1.39-a-share ex-dividend offer to privatise his company is "fair and reasonable", independent financial adviser PwC said in a circular to shareholders on Friday.
PwC said it arrived at this view on consideration that the offer price is at a premium of 2.9 per cent to the closing price of S$1.37 per share as at the latest practicable date.
It also took into account that the offer Price is at a premium of 27.0 per cent to the closing price of S$1.11 per share as at the unaffected date.
Also, it noted that the offer price is at a premium of 162.9 per cent to the net asset value per share of 54 cents as at 31 December 2015.
PwC also looked at stock valuation multiples implied by the offer price and compared them to valuation multiples of companies comparable to Osim.
It noted that the price-to-earnings ratio and Ev/Ebitda ratio implied by the offer price are within the range of the corresponding multiples of such companies. The Ev/Ebitda ratio refers to the enterprise value divided by earnings before interest, tax, depreciation and amortisation.
The price-to-earnings ratio implied by the offer price is 17.3. This is above the median ratios of comparable companies, which is 15.3, PwC said. It is also above the mean of their ratios, which is 14.7, it added.
The Ev/Ebitda ratio of 8.5 implied by the offer price is within the range of Ev/Ebitda ratios of the comparable companies, which is from 6.2 to 14.5.
PwC however, noted that the Ev/Ebitda ratio implied by the offer price was below the median ratio of the comparable companies of 11.0. It was also below their mean ratio of 10.2.
PwC, however, said that there are no publicly listed companies which may be considered directly comparable to Osim and thus the comparisons are just illustrative.
PwC also compared the premium of the offer price to the "last transacted price on the Unaffected Date" with the corresponding premia in previous delistings.
It also looked at other metrics like the premium of the final offer price to the one-month volume weighted average price of the stock.