SUNNINGDALE Tech said its independent financial adviser Provenance Capital has deemed the financial terms of its takeover bid as "fair and reasonable", and has advised the group's non-conflicted directors to recommend that shareholders vote in favour of the impending takeover scheme.

This was announced in Sunningdale's bourse filing on Thursday morning, where the precision plastic components manufacturer addressed frequently asked questions ahead of its scheme meeting scheduled for Feb 19, 2021.

A virtual dialogue session facilitated and moderated by the Securities Investors Association (Singapore) is due to take place on Feb 8, 2021 at 6pm. Sunningdale's chairman Koh Boon Hwee will deliver a presentation on the acquisition during the session, which will be exclusive to the company's shareholders.

To recap, Mr Koh and Novo Tellus PE Fund 2 made an offer in November 2020 for Sunningdale at S$1.55 in cash per share via a scheme of arrangement. The offer price was raised last month to S$1.65 per scheme share after activist investor Quarz Capital Management said the initial takeover price was "too low" and "significantly undervalues" the company.

In its latest announcement, Sunningdale said its revised scheme consideration of S$1.65 per scheme share is final as "both a commercial and a legal reality".

The company elaborated that its scheme consideration came in below the company's net asset value (NAV) as a broad range of valuation metrics - including those that take into consideration return on equity and return on assets - were contemplated.

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The offerer and Provence Capital specifically considered Sunningdale's price-to-earnings (P/E) ratio and enterprise multiple (EV/Ebitda) to be "more appropriate" metrics for valuing the company, said the firm.

When compared against precedent merger and acquisition transactions as well as trading multiples for comparable listed companies, Sunningdale said its P/E ratio is higher than the upper end of the ranges for both, while its EV/Ebitda multiple falls within range.

"It is also of note that Sunningdale shares have consistently traded well below the net tangible asset," added the group.

Some of the capital required for the offer will be contributed by Novos Tellus Capital Partners, a technology buyout fund headed by Sunningdale's non-independent director Loke Wai San, who is also a non-executive chairman of AEM Holdings.

Mr Loke first joined Sunningdale's board of directors in 2018 as an independent director, and was later on redesignated as a non-independent director with effect from Jan 1, 2021.

Mr Koh approached Mr Loke when he decided to make the offer as the financial resources required for the buyout "exceeded his personal ability", explained the firm in its filing.

Shares of Sunningdale were trading flat at S$1.63 as at 1.22pm.