A consortium led by Thomas Chua (picture), executive chairman of Teckwah Industrial Corporation, is offering 65 cents a share to buy out minority shareholders of the logistics and printing company.
The offer is made via Clementine Investments. Besides Chua and his family, the concerted parties include Chua Thian Poh, chairman of property company Ho Bee Holdings.
The offerors are in control some 58.04% of Teckwah. They intend to privatise the company. They do not intend to revise the offer price.
The offer price of 65 cents represents a 30% premium over Teckwah’s closing price of July 27 and a 42.5% premium over the 12-month volume-weighted average price up to the last unaffected trading date.
The offer price of 65 cents is below Teckwah’s net asset value per share of 68.1 cents as at June 30 2020, up slightly from its NAV of 65.39 cents as at Dec 31 2019.
Minority shareholders who accept the offer will still get to keep the 0.5 cent interim dividend declared by Teckwah on Aug 12.
On the same day, the company reported revenue of $76.7 million, down 2.5% y-o-y, as both its printing and logistics businesses generated lower turnover. However, thanks to government wage subsidy, it reported earnings of $5.3 million for the six months ended June 30, up 16.2% y-o-y, from $4.5 million.
As at June 30, the company holds cash and cash equivalents of $50.6 million.
Just on July 28, activist investor Quarz Capital Management Asia, which holds more than 6% of Teckwah, said that there’s a lack of clarity on what the company’s strategy is.
The fund noted that Teckwah’s directors were still drawing higher fees despite the lacklustre performance.
Quarz said the company in April last year paid $9.1 million for a 70% stake in a company called Profoto, at 2.6 times book value.
“With the acquired business highly exposed to the events and digital print for shopping malls and retail segments, the acquisition is likely to be loss-making these 2 years due to Covid-19,” said Quarz, which urged Teckwah to raise its dividend payout to 3.15 cents.
Teckwah shares last traded at 56 cents, up 16.7% year to date.
