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Offer price of S$0.45/share for Star Pharmaceutical is 'fair and reasonable': IFA

THE independent financial adviser (IFA) of mainboard-listed Star Pharmaceutical said on Tuesday that the offer price of S$0.45 a share is “fair and reasonable”.

The independent directors agreed with the advice and recommendations of the IFA CEL Impetus Corporate Finance and recommended that shareholders accept the offer.

This comes as the offer price represents a premium of about 180 per cent, 176 per cent, 187 per cent and 192 per cent over the volume-weighted average price per share for the one-month, three-month, six-month and 12-month periods, respectively.

Earlier in August, Star Pharmaceutical’s executive chairman Xu Zhi Bin had purchased from executive director Wang Qi a 22.67 per cent stake in the company for about S$1.5 million or S$0.142 per share, triggering an offer for the company.

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Mr Xu has given an irrevocable undertaking to accept the offer with his 30.52 per cent shareholding, and has also waived his rights to receive any cash settlement from the offeror as consideration for his shares.

With this, the offeror and parties acting in concert will hold more than 50 per cent of the voting rights attributable to the shares, rendering the offer unconditional.

The offeror, comprising Mr Xu and a special purpose vehicle of which he is sole director, does not intend to revise the offer price except in a competitive situation.

It also plans to delist the company. In its offer announcement, the offeror said that delisting and privatising the company will provide it and the company with more control and management flexibility in implementing its strategic initiatives and operational changes. It will also do away with the resources and costs of maintaining the company’s listing status.

It added that it does not plan to introduce any major changes to the existing business, or redeploy the fixed assets of the group, or discontinue the employment of the staff, other than in the ordinary course of business.

The offer closes at 5.30pm on Sept 23.