AN INDEPENDENT financial adviser (IFA) appointed by GK Goh on Tuesday (Mar 28) recommended shareholders accept the offer by GK Goh’s founder and chairman to take the company private at S$1.26 per share, on grounds that it is “fair and reasonable”.

Deloitte & Touche Corporate Finance, which was the IFA appointed, said it arrived at the decision after taking into account market quotations and liquidity of GK Goh’s shares, historical market performance as well as an assessment of the company’s financials.

It noted that the offer price of S$1.26 is above the company’s highest traded share price of S$1.230 in the five-year period prior to the last trading day.

The price to net asset value multiple (P/NAV) of 0.97 times implied by the offer price, while lower than the net asset value of S$1.303 per GK Goh share, is higher than the range of the trailing P/NAV multiples of GK Goh’s shares in the one-month, three-month, six-month, 12-month, three-year and five-year period prior to the last trading date, said the IFA.

Additionally, Deloitte & Touche thinks that while the NAV of S$1.303 is fairly representative of GK Goh’s assets, the carrying value of these assets may not be reflective of the realisable value of the assets as it has not taken into consideration the potential costs and other factors. 

This led the IFA to conclude that the offer was “fair and reasonable” and it thus recommended shareholders accept the offer.

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The offerer, named Verveine, is owned in equal parts by GK Goh founder Goh Geok Khim, who is also the company’s executive chairman, and managing director Goh Yew Lin.

They intend to restructure GK Goh’s asset mix if the proposed delisting and privatisation is successful.

Shares in GK Goh closed unchanged at S$1.26 on Tuesday.