Best World says potential Pedal Pulses deal will not change risk profile

BEST World International on Monday said its proposed acquisition of the remaining half stake in British beauty firm Pedal Pulses will not change its risk profile.

The proposed deal is not considered a major transaction under listing rules and will not have a significant impact on the group's gearing, the mainboard-listed skincare products firm said in response to queries from the Singapore Exchange (SGX).

Best World added that the target group - comprising Pedal Pulses, Margaret Dabbs Limited, Bare Feet Limited and Margaret Dabbs Europe Limited - is profitable, having achieved earnings before interest, taxes, depreciation and amortisation of around £1.8 million (S$3.2 million) for fiscal 2019.

Moreover, from an operational standpoint, the target group's existing management is incentivised - through the structure of the proposed deal - to continue contributing to the group's success for a number of years after Best World's entry into the group, Best World said.

Meanwhile, the board is of the view that the proposed acquisition does not constitute a diversification of Best World's business.

This is because the target group primarily provides health and beauty services and products for feet, while Best World's core business is providing health and lifestyle products which includes products for feet under its existing brand, PentaLab.

Pedal Pulses sells products and treatments for feet, hands and legs, and also operates Margaret Dabbs London clinics in the UK and internationally to offer podiatry and beauty services.

Best World further clarified that the proposed deal does not require shareholders' approval because it will not constitute a major transaction - even in the event that the group ultimately acquires all of the shares in Pedal Pulses - and will not have a material financial impact on the group or change its risk profile.

The board also confirmed that the proposed transaction is in the best interests of shareholders and the Best World's long-term growth, in response to SGX's queries.

On April 6, Best World disclosed it is looking to buy some or all of the remaining shares in Pedal Pulses, having acquired a 49.9 per cent stake in Pedal Pulses for about £13.9 million in cash.

Trading in Best World shares has been suspended since May 2019. The group is facing a bourse probe over its sales model in China.