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Nordic Group makes 23.8 cents per share offer for Starburst Holdings

Felicia Tan
Felicia Tan • 3 min read
Nordic Group makes 23.8 cents per share offer for Starburst Holdings
Shares in NGL and Starburst Group closed at 40.5 cents and 23.5 cents respectively on Jan 21.
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Nordic Flow Control, a wholly-owned subsidiary of Nordic Group (NGL), has made a cash offer of 23.8 cents per share for all the shares in Starburst Holdings on Jan 24.

The group had previously announced its intent to make the all-cash offer for Starburst Holdings on Nov 10, 2021.

Following an extraordinary general meeting (EGM) on Jan 7, NGL’s shareholders have granted their approval for the offer to be undertaken.

Mainboard-listed NGL is an investment holding company that provides management and administrative support to its subsidiaries. The group’s subsidiaries range from solution providers in areas such as automation and systems integration, precision engineering and cleanroom, air and water engineering services.

As at Jan 17, Nordic Group has a total issued and paid-up share capital of $22.4 million comprising 400 million ordinary shares.

Starburst Group is an engineering group that specialists in the design and engineering of training facilities. It was listed on the SGX-ST’s Catalist board in July 2014.

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Starburst Group has a total issued and paid-up share capital of around $43.8 million comprising 259.5 million shares as at Jan 17.

NGL’s offer of 23.8 cents values Starburst at around $61.8 million.

The offer price represents a premium of around 4.16% for the volume weighted average price (VWAP) per share for the last trading day, on Nov 9, 2021, one day before the pre-conditional offer announcement.

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The offer price has been determined on the basis that the offer shares will be acquired with the right to receive any distributions. This means that the offer may be reduced should the offer settlement date falls after the record date, and shareholders in Starburst Holdings receive their distributions accordingly.

The offer is conditional upon valid acceptances of around 50% of the voting rights in Starburst, and will turn unconditional once 69.7% valid acceptances are received.

The acquisition will be made compulsory once 90% acceptances have been received.

As at Jan 17, NGL has already received irrevocable undertakings from Edward Lim and Yap Tin Foo to sell their shares. Lim is the chairman and executive director of Starburst while Yap is the managing and executive director of the group. Together, the pair hold a collective 69.7% of the total shares in Starburst.

Upon the completion of the offer, Starburst Group will be delisted and privatised. NGL may also look into a “strategic and operational review” of the group once the offer is completed.

No major changes will be introduced to Starburst Group, says NGL.

According to NGL, Starburst Group’s business and operations are a “strategic fit” to the group, in which the offer will provide “synergistic benefits” to the group’s operations.

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Such benefits include the complementary engineering competencies between both groups; the acquisition of Starburst Group will “add civil and mechanical form structure products and services” to NGL.

In addition, the acquisition will boost NGL’s current market and client base with Starburst Group’s current client network in Southeast Asia and the Middle East.

To this end, NGL says it “sees potential” for Starburst Group’s continued growth, as it is one of the few players that operate mainly in Southeast Asia and the Middle East for the design, fabrication and the installation of anti-ricochet ballistic protection systems.

Shares in NGL and Starburst Group closed at 40.5 cents and 23.5 cents respectively on Jan 21.

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