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Business

OSIM founder ups buyout offer 5% to S$1.39/share

SINGAPORE -- The founder and chief executive of OSIM International, a Singaporean retailer of massage chairs and other lifestyle products, has raised his cash offer to buy the company to about $326 million Singapore dollars ($241 million), some S$26 million more than his previous offer, to take the company private.

     Ron Sim, who also serves as chairman of OSIM, is offering S$1.39 per share to minority stakeholders, up 5.3% versus his earlier offer of S$1.32. The figure is a 25.2% premium over the price recorded before the original announcement, and a 40.6% premium on the volume-weighted average price over the three months to Feb. 29. Sim currently owns about 68% of the company.

     The new offer is the final offer price and will close on April 25. Shareholders who accepted the earlier offer are entitled to receive the final offer price. Sim's previous offer of S$1.32 received little response, with a take-up rate of only 0.11%. Alfie Yeo, an analyst at DBS Group Research, said, "The higher offer price will definitely improve the 0.11% acceptance."

     Sim is determined to delist OSIM from the Singapore Exchange. The company wants to "reiterate that it intends to exercise its right to compulsorily acquire all the shares not acquired under the offer," once it buys 90% or more of OSIM's total issued shares, according to a press release issued Tuesday.

     Jodie Foo, an analyst at OCBC research, described Sim's offer as reasonable. She recommended shareholders accept the offer as "the stock lacks strong drivers for earnings growth."

     The Singapore unit of Credit Suisse is acting as OSIM's financial adviser. Law firm Morgan Lewis Stamford is advising Sim.

     OSIM has been facing both domestic and regional headwinds lately. When it announced its 2015 financial results, the company called the previous year "challenging," with sluggish retail sales in its core markets. It added that the year was "plagued by challenges from gyrating markets and currency turmoil in the region."

     

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