Novena swaps shares for 56.1% of Green World

Furniture retailer to make general offer for environment management firm

By Taila Krishnakumar
Jan 30, 2004
The Business Times

SESDAQ-LISTED Novena Holdings is acquiring a 56.1 per cent stake in Green World Holdings, another Sesdaq-listed company, in a one-for-one share swap deal that will raise the vendors' stake in Novena to about 35 per cent.

Novena and its subsidiaries already own 11.7 per cent of Green World. The deal, which signals furniture retailer Novena's diversification beyond the consumer lifestyle industry, will therefore raise the group's stake in the environmental management company to 67.8 per cent.

The vendors - Seah Hock Thiam, Lee Poh Choo and Han Chick Juan - already own 4.98 per cent of Novena. The deal will raise their joint interest to 34.99 per cent of Novena's enlarged capital.
The share swap involves Novena issuing 37 million new shares to the vendors in exchange for their 37 million Green World shares.

The consideration is $13.9 million based on Novena's closing price of 37.5 cents on Jan 28.

Trading in both the counters was halted yesterday, pending the announcement of the deal. Green World was last traded at 33.5 cents a share.

The completion of the proposed acquisition is subject, among other conditions, to the in-principle approval of the Singapore Exchange.

In the event that the conditions for the acquisition are satisfied, Novena and parties acting in concert will be required to make a mandatory unconditional general offer for all the remaining Green World shares in issue.

The offer will be either 32.5 cents in cash or such other price as the Securities Industry Council may decide, or one new Novena share.

The acquisition falls in line with Novena's earlier stated diversification plans. This month, deputy chairman and chief executive officer of Novena, Toh Soon Huat, set a turnover target of $500 million for the group over the next five years through strategic expansion and diversification. He is confident Green World will contribute to achieving this target.

'As the world becomes increasingly aware of the importance of environmental management, we see strong growth potentials for the industry in the years ahead,' he said.

Mr Toh also indicated Novena will diversify into the food business in the coming years.

For the six months ended June 2003, Novena posted net profit of $685,000, up from $208,000 a year ago, while sales grew 74 per cent to $31.4 million.

Green World reported a 35 per cent increase in profit of $1.3 million for the first half ended August of 2003.