A group of investors led by Teo Hong Lim, chairman and CEO of Roxy-Pacific Holdings, is offering to buy out other shareholders at 48.5 cents.
The consortium of 11 investors already control or has secured in between them 76.44% of the shares.
They intend to privatise the company, which is valued at $623.4 million based on the 48.5 cents offer price.
The offer price, at 19.8% premium over the last traded price on Sept 14, is final and will not be revised.
See also: Small is beautiful for Roxy-Pacific
As at June 30, the company’s net asset value was 37.33 cents per share, up from 36.97 cents as at Dec 30 2020.
The offer is an “attractive opportunity” for other shareholders to exit, given how illiquid Roxy Pacific shares are, as well as the “challenging macro and operating environment” faced by the company amidst the Covid-19 pandemic.
The offeror also cited “prolonged challenges” in the construction of development projects due to supply chain woes, labour crunch and higher material costs.
“The company may also face increasing risks of delays in project completion and potential penalties from late delivery exacerbated by the increasing risk of default by construction contractors,” the offeror adds.
The pandemic continues to “hinder” Roxy-Pacific’s hotel business.
“Continued weakness is expected in the hospitality industry as business travel and retail tourism remain lacklustre due to the surge in COVID-19 cases accelerated by the Delta variant.”
By privatising the company, the offeror will have more flexibility to “manage the business of the company and optimise the use of the company’s management and resources during this time of economic uncertainty.”
For 1HFY2021 ended June 30, the company reported earnings of $5.87 million, up 110% y-o-y. Revenue in the same period was up 20% y-o-y to $$141.2 million.