[SINGAPORE] Amara on Monday (Apr 28) received a voluntary conditional general offer at S$0.895 per share from a consortium led by property company Hwa Hong, which was formerly listed on the Singapore Exchange.
The offer is final and represents a premium of 27 per cent over Amara’s share price of S$0.705 on Apr 23, before the company called for a trading break. It values Amara at about S$514.6 million.
The S$0.895 offer price also represents a 42.1 per cent, 44.8 per cent, 46.7 per cent and 48.9 per cent premium over Amara’s volume-weighted average price for the one-month, three-month, six-month and 12-month period, respectively.
The offeror, a special-purpose vehicle called DRC Investments, intends to privatise Amara, it said, citing low trading liquidity and challenging macroeconomic conditions.
DRC Investments is 35 per cent owned by Hwa Hong and 30 per cent owned by Albertsons Capital – a company owned by Albert Teo, the hotel group’s chairman and chief executive, and Dawn Teo, Amara’s chief operating officer.
Wing Tai’s wholly owned subsidiary Winteam Investment also holds a 35 per cent stake in the consortium.
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The S$0.895 offer represents a 33 per cent premium over Amara’s net asset value per share as at end-December 2024.
Low trading liquidity of Amara’s shares was cited as one reason for the offer. The stock has had an average trading volume of 21,201 shares over the 12-month period leading up to Apr 23. This represented 0.004 per cent of the company’s total issued shares.
“The offer represents a unique cash exit opportunity for shareholders to liquidate and realise their entire investment at a premium, an option which may not otherwise be readily available due to the low trading liquidity of the shares,” it said.
DRC Investments further cited the challenging macro and operating environment that Amara faces.
The rise in protectionist policies and shifting trade agreements could disrupt supply chains and increase costs for businesses.
“These challenges may result in higher procurement expenses for the group’s operations, squeezing profit margins and impacting long-term growth prospects,” it said, adding that prolonged uncertainty could also lead to consumers tightening their purse strings.
Previous offer
The latest offer marks the second time Amara is being subjected to a privatisation deal.
In 2023, the hotel group received a voluntary cash offer at S$0.60 per share from Amethyst Assets – a consortium linked to Albert Teo, its chief executive, other members of his family and private equity investor Dymon Asia.
Amethyst cited a challenging growth environment and low trading liquidity as reasons for the deal. It also said high interest rates raised borrowing costs, impacting Amara’s profitability.
But the S$0.60-per-share offer failed to reach the compulsory acquisition threshold of 90 per cent, as the offeror garnered 88.39 per cent in shareholding interest.
As a result, Amethyst was not able to buy over the shares of shareholders who did not accept the offer.
Amara’s hotel portfolio comprises its flagship Amara Singapore in Tanjong Pagar, Amara Sanctuary Resort Sentosa, Amara Signature Shanghai (China) and Amara Bangkok (Thailand).
