The Straits Times / The Business Times News on OSIM

Osim seeks to delist Global Active

GAL's low liquidity, unlikely need to tap capital markets cited as reasons

IN line with its takeover intention, Osim International has made a proposal to take its recently acquired subsidiary Global Active Ltd (GAL) private - at an offer price of 23 cents a share.

A joint statement yesterday said Osim has formally proposed that GAL seek a voluntary delisting from the Singapore Exchange. Osim, a healthcare and lifestyle products group, and health-product distributor GAL are both listed on the mainboard.

Explaining the delisting move, Osim cited the low trading liquidity of GAL shares, the elimination of listing-associated costs (which will help improve profitability) and the unlikely need for GAL to tap the capital markets in the near future.

The exit cash offer of 23 cents a share is the same price that Osim had offered when its general offer for GAL was announced in April.

If Osim gets 90 per cent or more of GAL this time, it will be entitled to exercise the right of compulsory acquisition under stock exchange rules - leading to a delisting of GAL>

Already, Osim owns 67.17 per cent of GAL after the takeover. Another 15 per cent is held by GAL's CEO Cynthia Poa with the remaining 18 per cent in public hands.

Yesterday, GAL shares closed unchanged at 18 cents with only 2,000 shares changing hands, while Osim eased 2 cents to $1.28.

Their joint statement said: 'As Osim does not intend to dilute its shareholding in Global Active, the low liquidity of Global Active's shares is likely to continue indefinitely in view of the relatively thin free float.'

The statement also noted that Global Active had not raised any funds from the capital markets since listing in February last year.

'Should the company require funding, the company has various avenues available to it including bank borrowing and seeking the assistance of its parent company,' they said.

When contacted yesterday, Osim's founder and CEO Ron Sim told BT that the idea of delisting Global Active was already considered during the last general offer. He said any acquisition this time will be funded internally.

Last month, Osim said its second-quarter group revenue rose 47 per cent to $134.5 million, aided by a maiden 2-month revenue contribution from GAL. It also reported Q2 net profit as rising 52 per cent to $12 million.

Global Active made the headlines earlier this year over a spate of top management changes involving the company's founder and chief executive.

This was resolved when suspended chief Cynthia Poa was reinstated in April.