The Straits Times / The Business Times News on OSIM

OSIM to pay less for Brookstone on amended terms

OSIM International said that the terms of a major deal unveiled in April to buy American specialty retailer Brookstone have been amended after a weaker-than-expected performance by the Nasdaq-listed company.

Under the original deal, a consortium led by OSIM that also includes a unit of Temasek Holdings, was to pay US$20.50 a share or a total of US$456 million (S$775 million) for Brookstone, which has 288 retail outlets across the United States.

But now, the purchase price has been cut to US$20 a share, and some conditions have been imposed on the financing arrangements for the deal, healthy-lifestyle products company OSIM said in an announcement to the Singapore Exchange on Saturday.

The US company must meet certain profit targets in order for the financing to go through, and the company 'expects to be able to meet these conditions', it said.

Brookstone's chairman, president and chief executive, Mr Michael Anthony, said the deal still offered 'great value' for its shareholders.

'Due to a weaker-than-expected financial performance, certain terms of the agreement and plans of merger had to be refined in order to obtain the requisite financing to complete the transaction,' he said.

'The change in financing terms and the price per share has permitted the investor group to maintain committed financing with conditions that we believe will be satisfied based upon our current outlook for the business.'

Brookstone sells lifestyle gadgets such as massage chairs, electronic products and tools.

OSIM's products, which also include massage chairs, will be marketed in the US through Brookstone's healthy-lifestyle division.

When the deal was unveiled in April, analysts said it could add between 9 and 15 per cent to OSIM's bottom line.

The deal needs the approval of Brookstone shareholders.