Hafary founding family makes bid to take company private at S$0.64 a share

[SINGAPORE] The founding family of Hafary Holdings is moving to take the building-materials supplier private, citing low trading liquidity and mounting compliance costs.

Hafary chief executive Low Kok Ann and his family have made a cash offer of S$0.64 per outstanding share, based on a Monday (Sep 28) bourse filing. Trading of Hafary shares was halted on Monday morning prior to market open, before the news.

The bid, made through investment vehicle 23 Capital, represents a 4.9 per cent premium to the stock’s last closing price of S$0.61 on Friday, and a nearly 20 per cent premium over its 12-month volume-weighted average price.

The offer is strictly conditional on 23 Capital receiving enough valid acceptances to exercise its right to compulsorily acquire all remaining shares under Section 215(1) of the Companies Act. Once that threshold is reached, the offeror intends to make Hafary a wholly-owned subsidiary and delist it from the Singapore Exchange.

The Low family, including non-executive director Low See Ching and Low Bee Lan, controls 39.14 per cent of the company. They have secured an irrevocable undertaking from majority shareholder Hap Seng Investment Holdings, which owns 50.82 per cent. Combined, the bloc has pledged nearly 90 per cent of Hafary’s total shares towards the offer.

UOB is acting as the sole financial adviser for the offer.

Hafary, which supplies premium tiles, stone and sanitary ware, said it has not tapped Singapore’s equity capital markets to raise funds in the past decade. Instead, it has relied on alternative funding sources such as bank borrowings to finance its operations.

Meanwhile, trading interest in the company has been largely anaemic. Over the 12 months preceding the offer, Hafary averaged a daily trading volume of just 32,359 shares, representing less than 0.016 per cent of its total share base.

The cash offer provides a clean exit without brokerage fees for retail investors trapped by the stock’s illiquidity, said the offeror.

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The offer will remain open for acceptance for at least 28 days from the offer date of Sep 28.

Post-privatisation, the Low family expects to achieve greater management flexibility to navigate changing market conditions and optimise resources without the scrutiny and compliance costs of a public listing.

Hafary debuted on the SGX Catalist board in December 2009 and then moved over to the mainboard in June 2013.