Teo family, Dymon Asia consortium launches bid to take Amara private at S$0.60 a share

AMARA Holdings : A34 0% on Tuesday (Nov 14) received a voluntary cash offer at S$0.60 per share from a consortium linked to Albert Teo, the hotel group’s chief executive, other members of his family and private equity investor Dymon Asia.

The offer price is final and represents a premium of 53.8 per cent over Amara’s share price of S$0.39 on Jun 15, before the company announced that its key shareholders were in talks over a possible transaction. Amara most recently transacted at S$0.46 before a trading halt was called on Nov 10.

The S$0.60 offer price also represents a 70.5 per cent premium over Amara’s volume weighted average price for the one month up to Jun 15, and a 75.4 per cent premium over the three-month period.

The offeror, a special-purpose vehicle called Amethyst Assets, intends to privatise Amara, it said in a Tuesday bourse filing, citing a challenging growth environment and low trading liquidity.

Amethyst is 36.2 per cent-owned by First Security Pte Ltd (FSPL), a company in turn owned by Albert Teo and his siblings Susan Teo and Teo Kwee Chuan – who are Amara’s executive director and property division director respectively.

Concordia United, an investment vehicle under Dymon Asia Private Equity, holds another 30.3 per cent stake in Amethyst.

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Other shareholders of the offeror include Albertsons Capital – jointly owned by Albert Teo and his daughter Teo Shao-Lynn, Dawn – and Corinne Teo, another sibling of the chief executive who is the group’s quality and systems manager.

Reasons for offer

Low trading liquidity of Amara’s shares was cited as one reason for the offer. The stock has had an average trading volume of 31,473 shares over the 12-month period leading up to Jun 15. This represented less than 0.02 per cent of the company’s total issued shares.

“The offer provides shareholders with an opportunity to liquidate and realise their investment in the shares at a premium over the historical traded prices…which may otherwise not be available, given the low trading liquidity,” the offeror said in Tuesday’s filing.

It added that this was a “clean cash exit opportunity” without brokerage and other trading costs.

Amethyst further cited the challenging growth outlook that Amara faces. The higher-for-longer interest rate environment has raised borrowing costs, impacting profitability. Amara Singapore, the group’s flagship hotel, commenced operations in 1986 and needs to renew its aged assets to stay competitive.

“The requisite capital expenditure requirements from such a renewal amid higher costs of capital could potentially limit profitability in the near term,” the offeror said.

The offer will be funded by a combination of interest-free loans and a bank loan.