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OCBC Investment Research is recommending that shareholders of OSIM International should accept the founder's offer to privatise the luxury massage chair maker.
Early Monday, OSIM's founder and chief executive officer Ron Sim made a voluntary unconditional cash offer of S$1.32 a share to take the lifestyle company private. The offer price is S$1.30 a share excluding final dividends.
Mr Sim owns 68.31 per cent of OSIM.
The offer comes a month after OSIM reported a full-year net profit of S$51 million for 2015, down 50 per cent from 2014, even while revenue slipped 10 per cent to S$620 million.
Here are some comments by OCBC's analyst, Jodie Foo:
"The offer price represents a 31.8 per cent and 33.5 per cent premium to the volume weighted average price for the corresponding one-month and three-month periods respectively."
"The offer price also represents a significant premium of 61 per cent to our 12-month fair value estimate of S$0.82. Mr Sim intends to make the offer with a view to delist and privatise OSIM."
"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."