PS Group gets privatisation offer from chairman, MD at nearly three times last traded price
SINGAPORE (Aug 20): Executive chairman Teo Choon Hock (image) and managing director Kwek Keng Seng are offering to buy shares of little-known bolt and nuts supplier PS Group Holdings that they do not already own at 11.8 cents each.
Based on the company’s share price of four cents on Aug 6 – which was the last day the counter was traded – the offer price represents a premium of about 194.1%.
The offer price also represents a premium of about 265.6%, 266.4%, 266.4% and 59.2% over the volume weighted average price per share for the one-month, three-month, six-month and 12-month periods, respectively.
As at end June, PS Group’s net asset value per share of 16.02 cents.
The takeover offer was made by PS Investment, an investment holding company fully controlled by the pair.
PS Investment does not currently own shares in PS Group.
However, Teo owns 26.2 million shares or a 38.5% interest in the company, while Kwek owns 21.4 million shares or a 31.5% interest in the company.
PS Group has an issued and fully paid up share capital comprises 68 million shares.
The offer is conditional upon receiving not less than 90% of the total number of shares as at the close of the offer. This excludes the shares already held by both parties and any related corporations or their respective nominees.
According to the company’s filing with SGX today, the offer was made to resolve PS Group’s low trading volume.
The company had an average daily trading volume of about 3,777 shares, 2,203 shares, 1,146 shares and 1,004 shares during the respective one-month period, three-month period, six-month period and 12-month period up to and including Aug 6.
“The offer therefore provides shareholders who find it difficult to exit the company as a result of the low trading volume in 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,” PS Group says in the filing.
As part of the offer, Teo and Kwek intend to delist PS Group and take it private.
The pair believes that by taking the company private, the management will have more flexibility to manage the business, optimise the use of capital resources and facilitate the implementation of any operational change.
