Best World to buy back 10% of its shares for S$1.36 each

EMBATTLED beauty products distributor Best World International is buying back its shares again in an off-market offer.

The company announced in a bourse filing late on Tuesday (Apr 26) that it will buy back up to around 49 million shares, which accounts for approximately 10 per cent of its issued share capital, for S$1.36 each.

This is the second time in recent months that the company is buying back its shares. It announced at the end of last year that it was looking to buy back up to 54.4 million shares, which represented 10 per cent of its issued share capital at that time for the same price.

Best World's share buyback offer price is unchanged from its last traded price.

The counter has been suspended from trading after the regulatory arm of the Singapore Exchange, SGX RegCo, raised concerns over the legality of its business model in China.

The offer is open to all investors on an equal access, except a group of shareholders who collectively control 57.3 per cent of the company.

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Shareholders are entitled to sell back an aggregate amount of approximately 23.4 per cent of their shares.

These non-participating shareholders include founders Dora Hoan and Doreen Tan, executive director Huang Ban Chin, independent director Lee Sen Choon, as well as Hoan's family member Li Lihui and Tan's family member Pek Jia Rong.

The shares bought back will be cancelled, which means that they cannot be reissued on the market and are considered to have no financial value.

Best World said that buying back its shares for the second time would be an appropriate interim measure for the benefit of shareholders.

It said that there was positive response in its previous share buyback offer, as the total number of shares tendered for the offer more than doubled the maximum amount the company was buying back.

In November 2021, Best World had announced that it was exploring options for a delisting, as well as other options to provide shareholders with certain liquidity or cash value for their shares, including a share buyback off the market, as an interim measure while its shares remain suspended from trading.

Best World said on Tuesday that there is no assurance it will be able to raise the necessary external financing for the company to undertake any delisting exercise following this offer.

The long-running Best World saga traces back to a February 2019 report by The Business Times that first raised concerns over difficulties in reconciling sales of Best World's DR's Secret line of skincare products in China with consumer demand.

Short-seller Bonitas Research also cast doubt on the company's skincare product distribution model in China and its financials, which culminated in an independent review that uncovered questionable dealings.