Should shareholders accept OSIM’s privatisation offer?

It’s a reasonable price, analysts say.

Ron Sim’s decision to take OSIM private is a fair offer for minority shareholders, analysts say. Sim’s offer is particularly attractive on back of the company’s weak earnings outlook in coming quarters.

“We believe major shareholder Mr Ron Sim’s offer of SGD1.32/share to minority shareholders represents a reasonable price. This is in light of the weak equity market conditions and poor sales outlook in OSIM’s key markets over the next 12 months,” said RHB equity analyst James Koh.

“However, longer-term shareholders may probably not be keen to sell, as the fundamental intrinsic value of the company is likely to be higher than the offer price,” Koh added.

Meanwhile, OCBC analyst Jodie Foo said that the offer price represents a significant premium of 61% to their 12-month fair value estimate of $0.82.

“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,” Foo said.