Maybank Kim Eng is suggesting that shareholders of OSIM International, which is being privatised by founder and chairman Ron Sim, hold out for a better offer.
Earlier this morning, Sim, who owns 68.31% of the company, made an offer of $1.32 per share to privatise and then delist the massage chair maker.
Maybank Kim Eng notes that at this offer price of $1.32, OSIM is valued at 9.1 times historical EV/EBITDA, 16.3 times trailing P/E and 2.6 times P/B. This valuation levels are “somewhat below” regional specialty retailers, which on average are priced at 14.8 times EV/EBITDA, 33 times trailing P/E, and 4.1 times P/B.
OSIM’s share price surged just before this privatisation offer was announced. Nevertheless, the brokerage notes that OSIM has been sold down so much in the last 12 months, from the $2 level between late 2013 and 2014. “As such, investors might hold out for a better offer,” the brokerage states.
OCBC, on the other hand, has recommended that minority shareholders to accept, noting that Sim’s offer price represents a 31.8% and 33.5% premium over the volume weighted average price for the corresponding one-month and three-month periods, respectively. The offer price of $1.32 is also 61% higher than OCBC’s fair value on the company at 82 cents.
“Given the tough environment ahead and the lack of strong drivers for earnings, we view this offer to be reasonable and recommend shareholders to accept the offer,” writes analyst Jodie Foo in a March 7 note, hours after the privatisation offer was announced.
Shares of OSIM, which is now on a trading halt, last traded at $1.225.
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Earlier this morning, Sim, who owns 68.31% of the company, made an offer of $1.32 per share to privatise and then delist the massage chair maker.
Maybank Kim Eng notes that at this offer price of $1.32, OSIM is valued at 9.1 times historical EV/EBITDA, 16.3 times trailing P/E and 2.6 times P/B. This valuation levels are “somewhat below” regional specialty retailers, which on average are priced at 14.8 times EV/EBITDA, 33 times trailing P/E, and 4.1 times P/B.
OSIM’s share price surged just before this privatisation offer was announced. Nevertheless, the brokerage notes that OSIM has been sold down so much in the last 12 months, from the $2 level between late 2013 and 2014. “As such, investors might hold out for a better offer,” the brokerage states.
OCBC, on the other hand, has recommended that minority shareholders to accept, noting that Sim’s offer price represents a 31.8% and 33.5% premium over the volume weighted average price for the corresponding one-month and three-month periods, respectively. The offer price of $1.32 is also 61% higher than OCBC’s fair value on the company at 82 cents.
“Given the tough environment ahead and the lack of strong drivers for earnings, we view this offer to be reasonable and recommend shareholders to accept the offer,” writes analyst Jodie Foo in a March 7 note, hours after the privatisation offer was announced.
Shares of OSIM, which is now on a trading halt, last traded at $1.225.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us
On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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