A SPECIAL purpose vehicle (SPV) owned by GK Goh’ : G41 0%s founder and chairman, as well as its managing director, on Tuesday (Feb 28) launched a voluntary conditional offer to take the mainboard-listed investment company private at S$1.26 per share in cash.

The offer price represents a premium of 38.5 per cent over GK Goh’s last traded price of S$0.91, which was recorded on the last full trading day of the stock before the company requested for a trading halt on the morning of Feb 27.

It also represents premiums of 38.8 per cent, 39.2 per cent, 37.6 per cent and 34.8 per cent over the volume weighted average price for the one-month, three-month, six-month and 12-month periods, respectively – up to and including the last full market day prior to the offer announcement.

While the offer price is below GK Goh’s net asset value (NAV) per share of S$1.3033 as at Dec 31, 2022, the offeror highlighted that the implied consolidated, unaudited NAV per share (P/NAV) of 0.97 time is above the highest P/NAV of 0.9 time during the five-year period up to, and including, the stock’s last trading day.

Named Verveine, the offeror plans to exercise its right to compulsorily acquire all the offer shares not acquired under the offer if it receives valid acceptances in respect of not less than 90 per cent of the total number of issued shares.

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.

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Both are also directors of existing majority shareholder GKG Investment (GKGI), which owns some 197.6 million or 62.89 per cent of GK Goh. GKGI has given an irrevocable undertaking to accept the offer.

Notwithstanding the irrevocable undertaking, Verveine will have to shell out about S$147 million to fully acquire an outstanding 116.6 million shares in GK Goh.

Citing low trading liquidity along with considerable listing and associated costs, the offeror believes delisting and privatising GK Goh will enable it to “substantially dispense with such burdens” and instead, focus its resources and attention on its businesses, investments and operations.

Delisting and privatising the company will also enable greater control and management flexibility to pursue and implement business strategies and strategic options such as restructuring, it added.

Verveine said the offer price is final, and that it does not intend to increase the offer price. 

“After much thought, I have concluded that it is now appropriate to offer the company’s minority shareholders, many of whom have been with us for decades, the opportunity to realise their investment in the shares and delist the company. The world is an increasingly uncertain place, and there are outsized macroeconomic and geopolitical risks which make it increasingly challenging to generate satisfactory long-term returns,” said Goh Geok Khim in a press statement.

In the event its proposed delisting and privatisation is successful, the offerors intend to restructure GK Goh’s asset mix.

Goh Yew Lin expects this to be “a long process” and said GK Goh as an unlisted, private company would have greater flexibility to make strategic long-term decisions without as much pressure to deliver profits in the short term.

“Many of the company’s existing investments are in private equity and venture capital funds which will take time to mature, and which cannot easily be sold or redeemed. We also view the company’s aged care businesses and assets in Australia and Singapore as long-term in nature, requiring patience and determination to build value,” he added.