Isetan Mitsukoshi Holdings, the controlling shareholder of Isetan (Singapore) is offering to take the latter private at $7.20 per share, valuing the company at around $309 million.
The offer price is at a premium of 173.4% over the last traded price of $2.63 on March 28.
The offer is also at a similar premium of 178.9% over Isetan Singapore 's NAV of $2.58 per share.
According to Isetan Mitsukoshi Holding, which now holds 52.73% of the company, the offer is a rare opportunity for Isetan (Singapore) shareholders to "achieve full liquidity on their investment in the company."
"The shares of the company have had highly limited trading liquidity in the market," the offeror notes.
Isetan Mitsukoshi believes that by taking Isetan (Singapore) private, it can enjoy greater operational efficiencies as a wholly-owned subsidiary.
According to the company's website, it operates four department stores: Isetan Scotts, Serangoon, Tampines Central and Wisma Atria.
In addition, the company owns a few investment properties including a 25.77% stake in Wisma Atria along Orchard Road.
StarHill Global REIT, which owns the remaining 74.23% of Wisma Atria, values the property at $828.3 million as at June 30 2023.
See also: Broadway Industrial Group offer turns unconditional; offer will now close on Dec 23
Against this background, analysts believe that Isetan Mitsukhoshi Holding is offering a fair price.
Isetan's investment properties, including Wisma Atria and an industrial property, are carried at historical cost less depreciation. As at end-Dec, these properties were valued at $25.79 million.
However, based on Starhill Global REIT P40U 's last valuation as at end-June 2023, Isetan's 25.77% stake could be worth around $256 million, translating into a surplus of $230.57 million or $5.59 per share. No analyst covers Isetan, but following its announcement a few have made ballpark estimates.
For the most recent FY2023 ended Dec 31 2023, the company's revenue was down 3.82% to $84.3 million but even so, it reduced its losses from $2.58 million to $1.16 million. Furthermore, Isetan reported both positive operating and free cash flow, and it is in a net cash position.
Isetan (Singapore) shares will resume trading on April 2.
