The Straits Times / The Business Times News on OSIM

OSIM wants Global Active delisted

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

MR RON Sim's OSIM International is offering to take its subsidiary, Global Active, private by offering cash of 23 cents a share to all Global Active shareholders.

The price is 28 per cent higher than Global Active's last traded price of 18 cents a share. It is also the price at which OSIM made a takeover offer for Global Active earlier this year.

In a joint announcement with Global Active yesterday, OSIM said it is 'of the view that Global Active no longer requires to maintain a listed status'.

Firstly, trading has been thin in Global Active shares since OSIM's takeover offer closed on April 28.

With OSIM holding 67.17 per cent of the company and chief executive Cynthia Poa owning another 15 per cent, Global Active's free public float is only about 18 per cent, OSIM said.

'As OSIM does not intend to dilute its shareholding in Global Active, the low liquidity of its shares is likely to continue indefinitely, in view of the relatively thin free float,' it added.

Delisting Global Active will eliminate all listing and compliance costs, which will enhance its productivity and profitability, OSIM said.

Furthermore, Global Active has not raised any funds from the markets since listing and is unlikely to directly tap the capital markets in the foreseeable future, it added.

At 23 cents a share, OSIM is offering a premium of nearly seven times Global Active's net tangible assets as at the end of March.

Shareholders may choose to accept the exit offer for all or part of their shares. But if OSIM acquires at least 90 per cent of the offer shares, it has the right to compulsorily acquire all Global Active shares.

In view of OSIM's offer, Global Active will convene an extraordinary general meeting to seek shareholders' approval for the delisting and to apply to the Singapore Exchange to be voluntarily delisted.

OSIM's offer is not conditional on its delisting nor on receiving a minimum number of acceptances. Global Active closed level at 18 cents yesterday with only two lots done.

audrey@sph.com.sg