Hot stock: OSIM jumps to four-month high on privatisation bid

SHARES of healthy lifestyle products provider OSIM International jumped to a four-month high on Tuesday, a day after its founder and largest shareholder offered to pay more than S$300 million to take the company private.

OSIM's shares surged to S$1.395 during early-morning trade before paring some gains to S$1.355 as at 10.40am, up from the previous day's close of S$1.225.

The counter eventually closed at S$1.375, 12.2 per cent or 15 Singapore cents higher.

OSIM chairman and chief executive Rom Sim Chye Hock on Monday offered to buy out the company at a voluntary unconditional cash offer of S$1.32 per share. The offer price is pegged at a premium of about 31.8 per cent and 33.5 per cent to the volume-weighted average traded price per share, respectively, for the one-month and three-month periods up to and including Feb 29, 2016.

Mr Sim owns 506.5 million shares in the company, representing a 68.31 per cent stake as at March 7, 2016.

An RHB Bank research note said the offer to minority shareholders from Mr Sim represented a reasonable price "in light of the weak equity market conditions and poor sales outlook in OSIM's key markets over the next 12 months".

But the brokerage also noted longer-term shareholders "may . . . not be keen to sell as the fundamental intrinsic value of the company is likely to be higher than the offer price".

The offer comes a month after OSIM reported a full-year net profit of S$51 million for 2015, down 50 per cent from 2014 as revenue slipped 10 per cent to S$620 million.