Prime Highlights
- OUE unit proposes S$0.05 cash offer for OUE Healthcare.
- Offer values shares 28.2% above the August 21 closing price.
Key Facts
- OUE Healthcare is a regional healthcare group listed on Catalist.
- Treasure International Holdings and its partners own 89.68%.
Background
Treasure International Holdings, a wholly owned unit of OUE, has proposed to take regional healthcare group OUE Healthcare private through a scheme of arrangement at S$0.05 per share in cash.
The offer covers all issued ordinary shares in OUE Healthcare that are not already owned by Treasure International Holdings. The offeror and its concert parties currently control 89.68% of the healthcare group.
The proposed price represents a 28.2% premium to OUE Healthcare’s closing price of S$0.039 on August 21, the last full trading day before the announcement. It also stands above the company’s one-, three-, six- and 12-month volume-weighted average prices.
The S$0.05 offer is also 2.5% higher than OUE Healthcare’s latest unaudited net asset value of S$0.0488 per share as of June 30. The price exceeds the company’s closing share price throughout the past five years.
Low trading activity was a key reason behind the proposed privatisation. Over the 12 months to August 21, average daily trading volume represented only 0.05% of OUE Healthcare’s issued shares. Sixteen trading days recorded no transactions.
The companies said the deal would give shareholders a chance to exit at a premium despite the limited trading activity. Going private would also give management greater flexibility to pursue longer-term plans, particularly as its China operations continue to expand and stabilise.
The company expects to reduce expenses linked to maintaining its listed status and direct more resources towards operations. The offeror said it does not plan major changes to the business or employee arrangements.
The scheme requires shareholder, regulatory and court approvals. If completed, OUE Healthcare will become wholly owned by Treasure International Holdings and leave the Catalist board.
