[SINGAPORE] The independent financial adviser (IFA) appointed for the takeover bid for hotel group Amara has deemed the offer at S$0.895 a share to be “fair and reasonable”.
It has therefore advised the company’s directors considered to be independent to recommend shareholders to accept the offer, said the company on Tuesday (May 27) via a bourse filing.
In Apr 28 this year, Amara received an offer of S$0.895 per share from a consortium led by property company Hwa Hong, which was formerly listed on the Singapore Exchange.
This values the hotel group at about S$514.6 million and represents a premium of 27 per cent over Amara’s closing price of S$0.705 on Apr 23 before the company called for a trading halt the following day.
Other partners of the consortium include a fund sponsored by Hwa Hong and Malaysia-based Newfields, property company Wing Tai, as well as Albertsons Capital, whose shareholders are Albert Teo, Amara’s chairman and chief executive, and his daughter Dawn Teo, Amara’s chief operating officer.
The consortium has set up a special-purpose vehicle called DRC Investments, with the intention to privatise Amara over low trading liquidity and challenging macroeconomic conditions.
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W Capital was appointed the IFA for the deal on May 7, and Amara lost its free float on May 15, which meant that the Singapore Exchange will be suspending the trading of its shares at the close of the offer on Jun 10, given that less than 10 per cent of the company’s shares are now held by the public.
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 periods up to and including the last traded day, respectively.
In a circular issued by Amara on May 27, the company said that the IFA had looked at several factors when determining the offer to be fair and reasonable.
The IFA noted that the offer price fell within its estimated range of values between S$0.888 and S$0.959 per share. Amara’s share had also never closed above the offer price of S$0.895 before the deal was announced, and is at about a 27 per cent premium of its closing price of S$0.705 on Apr 23.
Shares of Amara went up 1.1 per cent or S$0.01 to close at S$0.90 on Tuesday.
