Osim CEO Makes $224 Million Cash Bid to Take Company Private

  • Shares surged most in six years before buyout announcement
  • Sim's offer is a premium to analysts' price estimates

Osim International Ltd. Chairman and Chief Executive Officer Ron Sim made an unconditional cash offer worth S$310 million ($224 million) for the shares he doesn’t already own in Asia’s biggest maker of massage chairs to take it private.

Sim, who controls 68.31 percent of Osim, offered to buy the shares at S$1.32 each through his investment vehicle, Vision Three Pte. Ltd., according to a statement Monday. That’s a 7.8 percent premium to the last traded price of S$1.225 on March 1 before the shares were suspended. The company said trading will resume Tuesday, superseding an earlier request to restart trading at 4:30 p.m. Monday.

“The offer provides an opportunity to Osim’s minority shareholders to sell their stake at a significant premium over the prevailing share price amidst challenging market conditions,” Sim’s investment company said in the statement.

Sim’s buyout came as no surprise for some traders.

“It’s not far-fetched for Sim to be taking the company private,” Ernest Lim, a trader a CIMB Group Holdings Bhd. in Singapore, said by phone. “He’s been buying the shares.”

On March 1, Osim rallied the most in six years and volume surged, triggering questions from the Singapore Exchange. The shares were later suspended pending a company announcement. Sim had been accumulating Osim’s stock and bought 4.07 million shares on Feb. 15, according to exchange filings.

Net income last year declined 50 percent to S$51 million as the currency turmoil across Asia dampened sales, the company said in January.

“Given the tough environment ahead and the lack of strong drivers for earnings, we view this offer to be reasonable and recommend shareholders to accept the offer,” Jodie Foo, an analyst at Oversea-Chinese Banking Corp., wrote in a note to clients.

The nine analysts covering the stock had an average 12-month price target of S$1.10 for Osim, according to data compiled by Bloomberg. Five of them had hold ratings, while the rest were evenly split with buy and sell recommendations.

Osim will be eventually delisted and taken private, according to the statement. 

Apart from massage chairs, the company distributes vitamins and health supplements under the GNC and Rich Life store chain. Osim also owns the TWG Tea franchise.

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