Poh Tiong Choon Logistics boss makes S$1.30 per share privatisation offer

SINGAPORE - The boss of Poh Tiong Choon Logistics has made an offer to delist the logistics and cargo transportation firm at $1.30 a share, valuing the company at $275.5 million.

Poh Tiong Choon chairman and chief executive Poh Choon Ann, together with investment firm Tower Capital, made the offer on Wednesday (Sept 20) , after securing irrevocable undertakings from shareholders amounting to 66.7 per cent of the firm's share capital.

At $1.30 a share, the offer price represents a 32.5 per cent premium to Poh Tiong Choon's one-month volume-weighted average price up to and including Sept 19, 2016.

This was the last full day of trading prior to the company's announcement on Sept 23 last year that its substantial shareholders were starting a strategic review relating to their shares.

The shares rose half a cent or 0.38 per cent to $1.32 yesterday morning before a trading halt was called.

Mr Poh said in a statement: "The company operates in a challenging business environment and continues to be affected by costs and the tightening of the labour market and interest rate fluctuations."

The company reported a net profit of $5.5 million for the six months to June 30, down 26 per cent from a year earlier.

Mr Poh said the offer price presents an attractive offer for shareholders who find it difficult to exit the company as a result of the low trading volume.

Poh Tiong Choon's trading volume has been generally low. In the 12 months to Tuesday (Sept 19), an average of 79,201 shares changed hands daily.

A homegrown company controlled by the Poh family, Poh Tiong Choon was listed on the Singapore Exchange in 1999. It provides third-party logistics services to firms across the chemical, food, retail, infrastructure and shipping sectors.

Tower Capital founder Danny Koh said: "The company has a long history since its founding in 1950. The logistics industry is a high conviction investment theme of Tower Capital Asia and we believe in the potential of the company with private equity backing."

The exit of Poh Tiong Choon from the Singapore bourse would follow on the heels of exits by more prominent logistics players.

In July, a Chinese consortium including China Vanke Co led a management buyout of warehouse operator Global Logistic Properties that valued it at $16 billion. Earlier this month, Chinese conglomerate HNA Group made a formal offer for CWT that valued it at about $1.4 billion.

Tower Capital was also part of the consortium that took another Singapore-listed company Eu Yan Sang private last year.