Nordic Group confirms offer for Starburst at S$0.238 per share

MAINBOARD-LISTED Nordic Group is making a firm offer for engineering specialist Starburst Holdings at S$0.238 per share in cash, after having received the green light from its shareholders on Friday (Jan 7).

Back in November, Nordic had announced that its wholly-owned unit, Nordic Flow Control, was planning to make a voluntary conditional offer for Starburst. This was on condition that it gets the approval to do so at an extraordinary general meeting, which took place on Friday.

The offer price represents a 4.16 per cent premium to Starburst's 1-month volume-weighted average price (VWAP) and a 9.07 per cent premium to the 3-month VWAP as of Nov 9, before Nordic first disclosed its intentions. The offer price now stands at a 1.28 per cent premium to Starburst's last transacted price of S$0.235, before a trading halt on Thursday.

The deal will require Nordic and its concert parties to control at least half the company. As of Friday, Nordic had received irrevocable undertakings from Starburst's executive chairman Edward Lim and managing and executive director Yap Tin Foo for some 173 million shares, representing 69.7 per cent of the company.

Listed on the Catalist board in 2014, Starburst is one of the few regional players with capabilities in anti-ricochet ballistic protection systems, which are used for shooting ranges and tactical training mock-ups. If the offer is successful, Nordic may delist Starburst, but has no plans to introduce major changes to the business.

Nordic believes that Starburst is a strategic fit. The offeror is focused on automation and systems integration, maintenance, repair, overhaul and trading and precision engineering, among other specialised services.

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"The engineering competencies, know-how and resources of Nordic and Starburst are complementary, and may be transferred and assimilated to build economies of scale and cost efficiencies," Starburst said in a bourse filing on Thursday.

The acquisition will also add civil and mechanical form structure products and services to the Nordic's existing suite of products. There is potential for cross-selling of the Nordic Group's mechanical, electrical and instrumentation, insulation and scaffolding services to Starburst's clients.

Nordic will next despatch the offer document to shareholders. Its shares closed at S$0.41 on Friday, down 1.2 per cent.