VIZ BRANZ LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration No. 199401631K)
Directors:
Registered Office:
Mr Yuen San Seng (Non-Executive Chairman and Independent Director)
Mr Ben Chng Beng Beng (Group Managing Director and Deputy Chairman)
Mr Chng Khoon Peng (Executive Director)
Mr Tan Kok Hiang (Non-Independent, Non-Executive Director)
Mr Tan Hwee Yong (Independent Director)
50 Raffles Place, #32-01
Singapore Land Tower
Singapore 048623
13 August 2013
To: The Shareholders of Viz Branz Limited
Dear Sir / Madam
THE REVISED MANDATORY UNCONDITIONAL CASH OFFER BY THE OFFEROR FOR THE OFFER
SHARES
1.
BACKGROUND
1.1
Revised Offer. On 1 August 2013, Credit Suisse (Singapore) Limited (“Credit Suisse”), for and on
behalf of Pluto Rising Pte Ltd (“Offeror”), issued an announcement (the “Supplemental Notice”)
on the revision of the mandatory conditional cash offer by Credit Suisse, for and on behalf of the
Offeror (the “Offer”), for all the issued and paid-up ordinary shares in the capital of Viz Branz
Limited (the “Company”) other than those held by the Company as treasury shares and those
already owned, controlled or agreed to be acquired, directly or indirectly, by the Offeror as at the
date of the Offer (the “Offer Shares”). In the Supplemental Notice, the Offeror announced that it
was increasing the Offer price from S$0.78 for each Offer Share to $0.815 for each Offer Share
(the “Revised Offer”).
This supplemental letter (“Supplemental Letter”) is important as it contains the
recommendation of the directors of the Company who are considered independent for
the purpose of the Revised Offer (“Independent Directors”) and the advice of SAC Capital
Private Limited (“SAC Capital”) to the Independent Directors in relation to the Revised
Offer. This Supplemental Letter requires the immediate attention of shareholders of the
Company (“Shareholders”) and Shareholders should read it carefully.
1.2
Supplemental Notice. Shareholders should have received a copy of the Supplemental Notice
setting out, inter alia, the revisions to the Offer. Shareholders are advised to read the terms and
conditions of the Revised Offer set out in the Supplemental Notice carefully.
A copy of the Supplemental Notice is available on the website of the SGX-ST at www.sgx.com.
1.3
Definitions. Unless otherwise stated, all terms and expressions used in this Supplemental Letter
shall have the meanings given to them in the circular to Shareholders dated 2 August 2013 (the
“Offeree Circular”) issued by the Company in relation to the Offer.
LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS
1.4
Purpose of this Supplemental Letter. The purpose of this Supplemental Letter is to
provide Shareholders with relevant information pertaining to the Revised Offer and to set
out the recommendation of the Independent Directors and the advice of SAC Capital to the
Independent Directors in relation to the Revised Offer. Shareholders should carefully consider the
recommendation of the Independent Directors and the advice of SAC Capital to the Independent
Directors set out in this Supplemental Letter before deciding whether or not to accept the Revised
Offer.
If you are in any doubt in relation to this Supplemental Letter or as to the action you should take,
you should consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other
professional adviser immediately.
2.
THE REVISED OFFER
The Offeror has offered to acquire the Offer Shares on the terms and subject to the conditions set
out in the Supplemental Notice, the Offer Document, the FAA and/or the FAT. The principal terms
and conditions of the Revised Offer, as extracted from the Supplemental Notice is set out below.
2.1
Final Offer Price. As stated in the Supplemental Notice, the Offeror is making the Revised Offer
on the following basis:
For each Revised Offer Share: S$0.815 in cash (“Final Offer Price”).
The Offeror does not intend to further revise the Final Offer Price.
The Final Offer Price of S$0.815 in cash for each Offer Share is $0.035 higher than the preceding
offer price from the Offeror of S$0.78 in cash for each Offer Share.
Pursuant to Rule 20.4 of the Code, Shareholders who have earlier accepted the Offer are entitled
to receive the Final Offer Price. Accordingly, no further action in respect of the Offer is required to
be taken by Shareholders who have earlier accepted the Offer and who have not withdrawn their
acceptances.
2.2
Other terms. According to the Supplemental Notification, save as disclosed in the Supplemental
Notification, all other terms and conditions of the Revised Offer as set out in the Offer Document
remain unchanged.
2.3
Revised Offer Closing Date. Shareholders should note that the closing date for the Revised
Offer remains at 5.30 p.m. (Singapore time) on 16 August 2013 or such later date(s) as may be
announced from time to time by or on behalf of the Offeror (the “Revised Offer Closing Date”).
3.
DIRECTORS’ INTERESTS AND INTENTIONS
3.1
Interests in Shares. Details of the Directors’ direct and deemed interests in the Shares as at 2
August 2013, being the latest practicable date prior to the printing of this Supplemental Letter (the
“Latest Practicable Date”), are as follows:
Direct Interest as at the
Latest Practicable Date
Name
Mr Yuen San Seng
Deemed Interest as at the
Latest Practicable Date
No. of Shares
650,000
(%)1
0.18
No. of Shares
–
(%)1
–
2
Mr Ben Chng Beng Beng
–
–
227,023,707
63.95
Mr Chng Khoon Peng
–
–
–
–
Mr Tan Kok Hiang
Mr Tan Hwee Yong
3
3
–
–
–
–
130,000
0.04
–
–
-2-
LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS
Notes:
3.2
1
Based on 354,996,976 Shares (excluding treasury Shares) as at the Latest Practicable Date.
2
Mr Ben Chng Beng Beng is deemed interested in all the Shares held or acquired by the Offeror (as the case may
be) as he is the sole shareholder of Mercury Rising which is the sole shareholder of the Offeror.
3
As at the Latest Practicable Date, Mr Tan Kok Hiang has accepted the Revised Offer.
Intentions with regard to the Revised Offer. As at the Latest Practicable Date, the following
Directors who directly hold Shares or who exercise a power of disposition of any Shares intend to
respond to the Revised Offer in respect of such Shares in the following manner:
Each of the Directors who directly holds Shares in the Company, being Messrs Yuen San Seng
and Tan Hwee Yong, intends to accept the Revised Offer in respect of each of their shareholdings
as set out against their names in Paragraph 3.1 of this Supplemental Letter above.
4.
ADVICE AND RECOMMENDATIONS
4.1
General. SAC Capital, the independent financial adviser to the Independent Directors in respect
of the Revised Offer, has issued an opinion in response to the Revised Offer. Shareholders should
read and consider carefully the recommendations of the Independent Directors and the advice
of SAC Capital to the Independent Directors dated 13 August 2013 (“IFA Letter on the Revised
Offer”).
4.2
Independent Directors. Save for Mr Ben Chng Beng Beng, all of the Directors consider
themselves to be independent for the purpose of making a recommendation on the Revised Offer.
4.3
Advice of SAC Capital to the Independent Directors in respect of the Revised Offer. The
Independent Directors have carefully considered the advice of SAC Capital to the Independent
Directors in respect of the Revised Offer, which is set out on pages 6 to 37 of this Supplemental
Letter. SAC Capital’s advice to the Independent Directors in respect of the Revised Offer, as
extracted from Section 5 of the IFA Letter on the Revised Offer, is set out in italics below and
should be read in conjunction with, and in the context of, the full text of the IFA Letter on the
Revised Offer. Unless otherwise stated, all terms and expressions used in the extract below shall
have the meaning given to them in the IFA Letter on the Revised Offer.
“Based on our analysis set out above and after considering all relevant information available to us
as at the Latest Practicable Date, from a financial point of view, we are of the opinion that the Final
Offer Price is, on balance, fair and reasonable.
The Independent Directors may wish to consider advising Shareholders who:
(a)
wish to realize all or part of their investments in the Shares; and/or
(b)
are uncertain of the longer term performance and prospects of the Group,
to (i) accept the Revised Offer; or (ii) sell the Shares in the open market if they can obtain
a price higher than the Final Offer Price (after deducting related expenses). In this regard, we
note that the Shares had traded at and above the Final Offer Price for the period after the Offer
Announcement Date and up to the Latest Practicable Date.
The Independent Directors may also wish to consider advising Shareholders who:
(a)
are prepared to take a longer term view of their investment in the Shares; and/or
(b)
are positive about the prospects of the Group,
to retain all or part of their shareholdings in the Company.”
-3-
LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS
4.4
Recommendation of the Independent Directors in respect of the Revised Offer. The
Independent Directors, having considered carefully the terms of the Revised Offer and the
advice given by SAC Capital to the Independent Directors in the IFA Letter on the Revised Offer,
CONCUR with the opinion of SAC Capital in respect of the Revised Offer.
Accordingly, the Independent Directors recommend the Shareholders who:
(a)
wish to realize all or part of their investments in the Shares; and/or
(b)
are uncertain of the longer term performance and prospects of the Group,
to (i) accept the Revised Offer; or (ii) sell the Shares in the open market if they can obtain a price
higher than the Final Offer Price (after deducting related expenses).
The Independent Directors also recommend the Shareholders who:
(a)
are prepared to take a longer term view of their investment in the Shares; and/or
(b)
are positive about the prospects of the Group,
to retain all or part of their shareholdings in the Company.
5.
No Regard to Specific Objectives. In rendering the advice and the recommendations above,
both the SAC Capital and the Independent Directors have not had regard to the specific
investment objectives, financial situation, tax status, risk profiles or unique needs and constraints
of any individual Shareholder. As different Shareholders would have different investment objectives
and profiles, the Independent Directors recommend that any individual Shareholder who may
require advice in the context of his specific investment portfolio should consult his stockbroker,
bank manager, solicitor, accountant, tax adviser or other professional adviser immediately.
SHAREHOLDERS ARE ADVISED TO READ THE FULL TEXT OF THE IFA LETTER ON
THE REVISED OFFER WHICH IS SET OUT ON PAGES 6 TO 37 OF THIS SUPPLEMENTAL
LETTER CAREFULLY. SHAREHOLDERS SHOULD NOTE THAT THE SAC CAPITAL’S OPINION
SHOULD NOT BE RELIED UPON BY ANY SHAREHOLDER AS THE SOLE BASIS FOR
DECIDING WHETHER OR NOT TO ACCEPT THE REVISED OFFER.
6.
ACTION TO BE TAKEN BY SHAREHOLDERS
Shareholders who wish to accept the Revised Offer must do so not later than 5.30 p.m. on 16
August 2013 or such later date(s) as may be announced from time to time by or on behalf of
the Offeror. Shareholders who wish to accept the Revised Offer should refer to Appendix 2 of
the Offer Document and in the accompanying FAA and/or FAT, which sets out the procedures for
acceptance of the Revised Offer.
Shareholders who do not wish to accept the Revised Offer need not take any further action in
respect of the Offer Document (including the FAA and/or FAT) which has been sent to them.
-4-
LETTER TO SHAREHOLDERS FROM THE BOARD OF DIRECTORS
7.
RESPONSIBILITY STATEMENT
The Directors (including any who may have delegated detailed supervision of this Supplemental
Letter) have taken all reasonable care to ensure that the facts stated and all opinions expressed
in this Supplemental Letter (other than the IFA Letter for which the IFA has taken responsibility)
are fair and accurate and that no material facts have been omitted the omission of which would
make any statement in this Supplemental Letter (other than the IFA Letter for which the IFA has
taken responsibility) misleading, and they jointly and severally accept responsibility accordingly.
Where any information in this Supplemental Letter (other than the IFA Letter for which the IFA has
taken responsibility) has been extracted or reproduced from the Offer Document or from published
or publicly available sources, the sole responsibility of the Directors has been to ensure through
reasonable enquiries that such information is accurately extracted from such sources or, as the
case may be, reflected or reproduced in this Supplemental Letter.
Yours faithfully
For and on behalf of the Board of Directors
VIZ BRANZ LIMITED
Mr Yuen San Seng
Non-Executive Chairman and Independent Director
-5-
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
SAC CAPITAL PRIVATE LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration Number 200401542N)
1 Robinson Road #21-02 AIA Tower
Singapore 048542
13 August 2013
To:
The Independent Directors of Viz Branz Limited (in relation to the Revised Offer)
Mr Yuen San Seng
Mr Chng Khoon Peng
Mr Tan Kok Hiang
Mr Tan Hwee Yong
Dear Sirs
THE REVISED MANDATORY UNCONDITIONAL CASH OFFER FOR ALL THE ISSUED AND PAID-UP
ORDINARY SHARES IN THE CAPITAL OF VIZ BRANZ LIMITED
Unless otherwise defined or the context otherwise requires, all terms defined in the supplemental letter
dated 13 August 2013 (the “Supplemental Letter”) shall have the same meanings herein.
1.
INTRODUCTION
On 5 July 2013 (the “Offer Announcement Date”), Credit Suisse (Singapore) Limited (“Credit
Suisse”) announced (the “Offer Announcement”), for and on behalf of Pluto Rising Pte. Ltd.
(the “Offeror”), that the Offeror is making a mandatory unconditional cash offer (the “Offer”) for
all the Offer Shares (as defined below). The Offeror had on 5 July 2013, acquired 135,800,219
issued ordinary shares (“Shares”) in the capital of Viz Branz Limited (the “Company”) from Mr
Chng Khoon Peng, representing approximately 38.25% of the total number of the issued Shares
(excluding treasury Shares) (the “Share Acquisition”).
As a result of the Share Acquisition, the Offeror and persons acting or presumed to be acting
in concert with the Offeror (collectively, the “Offeror Concert Group”) own 206,210,002
Shares, representing approximately 58.09% of the total number of issued Shares (excluding
treasury Shares). In accordance with Section 139 of the Securities and Futures Act (Cap. 289
of Singapore) (the “Securities and Futures Act”) and Rule 14.1 of the Singapore Code on
Take-Overs and Mergers (“Code”), the Offeror has incurred an obligation to make a mandatory
unconditional cash offer for all the Shares (other than those already owned, controlled or agreed to
be acquired by the Offeror Concert Group and treasury Shares held by the Company) (the “Offer
Shares”).
On 1 August 2013 (the “Revised Offer Announcement Date”), Credit Suisse, for and on behalf
of the Offeror, issued an announcement (the “Revised Offer Announcement” or “Supplemental
Notice”) that the Offeror has increased its offer price from S$0.780 to S$0.815 (the “Revised
Offer”).
In connection with the Revised Offer, the Company has appointed us as the independent financial
adviser to the directors of the Company (the “Directors”) who are independent in relation to the
Revised Offer (the “Independent Directors”) to advise on the financial terms of the Revised Offer.
This letter, which sets out, inter alia, our evaluation and advice, has been prepared for the use of
the Independent Directors in connection with their consideration of the Revised Offer and their
recommendation to Shareholders arising thereof.
-6-
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
2.
OUR TERMS OF REFERENCE
We have been appointed as the independent financial adviser to the Independent Directors
to provide an assessment of the financial terms of the Revised Offer in order to advise the
Independent Directors in respect of their recommendation to Shareholders on the Revised Offer.
We were not privy to the negotiations in relation to the Revised Offer or any other offers. We do
not, by this letter, make any representation or warrant the merits of the Revised Offer. We have
not been requested to express, and we do not express, an opinion on the relative merits of the
Revised Offer as compared to any other alternative transactions. We have not been instructed
or authorised to solicit, and we have not solicited, any indications of interest from any third party
with respect to the Shares. We have not conducted a comprehensive independent review of the
business, operations or financial condition of the Company and its subsidiaries (collectively, the
“Group”) or the Offeror. Our evaluation is confined to the financial terms of the Revised Offer
and we have not evaluated the commercial rationale or merits of the Revised Offer or the future
growth prospects or earnings potential of the Group after the completion of the Revised Offer.
Accordingly, we do not express any view as to the prices at which the Shares may trade or on the
future financial performance of the Group after the completion of the Revised Offer.
In the course of our evaluation, we have held discussions with the Directors and the management
of the Group (the “Management”) and have relied on the information and representations, whether
written or verbal, provided to us by the Directors and/or the Management, including the information
contained in the Supplemental Letter. We have not independently verified such information
or representations and accordingly cannot and do not warrant or accept responsibility for the
accuracy, completeness or adequacy of these information or representations. We have, however,
made such enquiries and exercised such judgement (as we deemed necessary) in assessing the
information and representations provided to us, and have found no reason to doubt the reliability
of such information or representations which we have relied on.
The Directors (including those who may have delegated detailed supervision of the Supplemental
Letter) have confirmed that, having made all reasonable enquiries and to the best of their
knowledge and belief, (a) all material information available to them in connection with the Revised
Offer has been disclosed in the Supplemental Letter; (b) such information is true and accurate
in all material respects; and (c) there is no other information or fact, the omission of which
would cause any information disclosed to us or the facts stated in the Supplemental Letter to
be inaccurate, incomplete or misleading in any material respect. Whilst care has been exercised
in reviewing the information which we have relied on, we have not independently verified the
information but nonetheless have made such enquiries and exercised such judgement as were
deemed necessary and have found no reason to doubt the reliability of the information or facts.
Accordingly, no representation or warranty, expressed or implied, is made and no responsibility is
accepted by us concerning the accuracy, completeness or adequacy of such information or facts.
We have not made any independent evaluation or appraisal of the assets and liabilities of the
Group. We have also not been furnished with any such evaluation or appraisal, except for the
valuation summary and reports prepared by Colliers International Consultancy & Valuation
(S) Pte Ltd, Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd. and Henan Xin
Surplus Assets Appraisal Firm, being the independent valuers appointed by the Company (the
“Independent Valuers”). As we are not experts in the evaluation or appraisal of the assets set out
in the valuation summary and reports, we have placed sole reliance on the Independent Valuers in
the evaluation or appraisal of the aforementioned assets.
Our opinion and advice, as set out in this letter, are based on the market, economic, industry
and other applicable conditions prevailing on, and the information made available to us as of, the
latest practicable date, being 2 August 2013 (the “Latest Practicable Date”). Such conditions
may change significantly over a relatively short period of time and we assume no responsibility to
update, revise or reaffirm our opinion and advice in the light of any subsequent development after
the Latest Practicable Date that may affect our opinion and advice contained herein.
-7-
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
In rendering our opinion and advice, we have not had regard to the specific investment objectives,
financial situation, tax position or unique needs and constraints of any Shareholder or any
specific group of Shareholders. We recommend that any individual Shareholder or specific group
of Shareholders who may require specific advice in relation to his or their investment portfolio(s)
should consult his or their legal, financial, tax or other professional adviser.
Our opinion and advice in relation to the Revised Offer should be considered in the context
of the entirety of this letter and the Supplemental Letter.
The Company has been separately advised by its own professional advisers in the preparation
of the Supplemental Letter (other than this letter). We have had no role or involvement and have
not provided any advice, financial or otherwise, in the preparation, review and verification of the
Supplemental Letter (other than this letter). Accordingly, we take no responsibility for and express
no views, expressed or implied, on the contents of the Supplemental Letter (other than this Ietter).
3.
THE REVISED OFFER
3.1
Final Offer Price. As stated in the Supplemental Notice, the Offeror is making the Revised Offer
on the following basis:
For each Revised Offer Share: S$0.815 in cash (the “Final Offer Price”).
The Offeror does not intend to further revise the Final Offer Price.
The Final Offer Price of S$0.815 in cash for each Offer Share is $0.035 higher than the preceding
offer price from the Offeror of S$0.780 in cash for each Offer Share.
Shareholders who have earlier accepted the Offer are entitled to receive the Final Offer Price.
Accordingly, no further action in respect of the Offer is required to be taken by Shareholders who
have earlier accepted the Offer and who have not withdrawn their acceptances.
3.2
Other terms. According to the Supplemental Notification, save as disclosed in the Supplemental
Notification, all other terms and conditions of the Revised Offer as set out in the offer document
dated 19 July 2013 (the “Offer Document”) remain unchanged.
3.3
Revised Offer Closing Date. Shareholders should note that the closing date for the Revised
Offer remains at 5.30 p.m. (Singapore time) on 16 August 2013 or such later date(s) as may be
announced from time to time by or on behalf of the Offeror (the “Revised Offer Closing Date”).
4.
FINANCIAL ASSESSMENT OF THE REVISED OFFER
In assessing the financial terms of the Revised Offer, we have taken into account the following
factors which we consider to have a significant bearing on our assessment:
(a)
Market quotation and trading liquidity of the Shares;
(b)
Book net tangible asset value (“NTA”), ex-cash book NTA and revalued NTA of the Group;
(c)
Comparison of valuation statistics of companies broadly comparable to the Group;
(d)
Comparison with recent successful privatisation transactions and delisting offers of
companies listed on the SGX-ST; and
(e)
Other relevant considerations.
-8-
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
4.1
Market Quotation and Trading Liquidity of the Shares
4.1.1 Share price performance and trading liquidity
A graphical representation of the daily closing prices and volume traded of the Shares for the
period commencing 12 months prior to the Offer Announcement and ending on the Latest
Practicable Date is set out below:
Source: Bloomberg L.P.
A summary of the salient announcements relating to the Group’s business operations and the
Offer during the aforesaid period is as follows:
Date
Event
10 July 2012
Announcement on the non-binding approach in relation to a possible
share transaction by a substantial Shareholder (the “Possible Share
Transaction”).
11 July 2012
Announcement on the clarification in relation to the business times article
entitled “Major Viz Branz Shareholder Gets ‘Buy More’ Offer” dated 11 July
2012 as well as the Company’s announcement dated 10 July 2012, of which
the Company clarified that the Possible Share Transaction by the substantial
Shareholder involved the possible sale of such substantial Shareholder’s
Shares to the third party which may or may not lead to an offer being made
for the Shares.
6 August 2012
Announcement providing an update on the Possible Share Transaction that
discussion remained ongoing with the third party as well as other potential
interested parties who approached the substantial Shareholder in relation to
the Possible Share Transaction.
27 August 2012
Announcement on the unaudited results for the financial year ended 30
June 2012 (“FY2012”), which reported a 47.8% increase in net profit
attributable to Shareholders from S$11.5 million in the financial year ended
30 June 2011 (“FY2011”) to S$17.0 million in FY2012.
-9-
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
3 September 2012
Announcement providing an update on the Possible Share Transaction, that
the substantial Shareholder entered into a (generally) non-binding indicative
preliminary letter of indication of interest with one of the potential interested
party to facilitate and advance further discussions.
In addition, it was also announced the Company decided to put on hold its
proposed bonus issue as announced on 25 May 2012 as it may potentially
constitute a frustrating action on the part of the Company (if and in the
event that the Possible Share Transaction by the substantial Shareholder
leads to an offer being made for the Shares).
2 October 2012
Announcement providing an update on the Possible Share Transaction, that
discussions remain ongoing between the substantial Shareholder and the
potential interested party.
8 October 2012
Announcement providing an update on the Possible Share Transaction, that
the substantial Shareholder, being Mr Ben Chng Beng Beng, had disposed
of 57,000,000 Shares, representing approximately 16.06% of the entire
issued and paid-up share capital of the Company to Lam Soon Cannery
Private Limited, for an aggregate sale consideration of S$41,895,000 at the
sale price of S$0.735 per Share.
17 October 2012
Announcement on the application to the Singapore Exchange Securities
Trading Limited (the “SGX-ST”) for an extension of 2 months, till 31
December 2012, in holding the company’s annual general meeting for
FY2012 (the “Application”). As part of the statutory audit of the Company’s
financial statements for FY2012, the Company’s auditors are conducting
additional audit procedures (the “Additional Audit Procedures”) on
transactions between the Group and the Myanmar distributors, and also
seeking clarifications from Mr Chng Khoon Peng on the bases underlying
his allegations. The Application was therefore made to enable the Additional
Audit Procedures to be completed. If the Additional Audit Procedures can
be completed earlier, the Company will proceed to hold its annual general
meeting expeditiously and prior to 31 December 2012.
18 October 2012
Announcement on the SGX-ST’s approval to the extension of time for
holding the Company’s FY2012 annual general meeting subject to, inter alia,
approval of the same being obtained from the Accounting and Corporate
Regulatory Authority of Singapore (“ACRA”).
30 October 2012
Announcement on the approval from ACRA for extension of time under
Section 201(2) of the Companies Act (Cap. 50 of Singapore) for laying its
accounts before Shareholders.
14 November 2012
Announcement on the unaudited interim financial results for the 3-month
financial period ended 30 September 2012 (“1Q2013”) which reported a
15.4% increase in net profit attributable to Shareholders from S$3.9 million
in the 3-month financial period ended 30 September 2011 to S$4.5 million
in 1Q2013.
30 November 2012
Announcement on withdrawal of allegations and complaint by Mr Chng
Khoon Peng.
6 December 2012
Announcement on the audit opinion in relation to the FY2012 financial
statements, that its auditors have given a disclaimer of opinion, the
background and basis of which were set out in the auditors’ report dated 6
December 2012.
- 10 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
6 February 2013
Announcement on the unaudited interim financial results for the 6-month
financial period ended 31 December 2012 (“1H2013”) which reported a
3.2% increase in net profit attributable to Shareholders from S$9.3 million
in the 6-month financial period ended 31 December 2011 to S$9.6 million in
1H2013.
Announcement on the withdrawal of the proposed bonus issue as
announced on 25 May 2012.
20 February 2013
Notice of book closure date for tax-exempted (first-tier) dividend of S$0.01
per Share in which share transfer books and register of members of the
Company will be closed from 5.00 p.m. on 6 March 2013 to 7 March 2013.
13 May 2013
Announcement on the unaudited interim financial results for the 9-month
financial period ended 31 March 2013 (“9M2013”) which reported a 4.4%
increase in net profit attributable to Shareholders from S$13.6 million in the
9-month financial period ended 31 March 2012 (“9M2012”) to S$14.2 million
in 9M2013.
5 July 2013
Announcement on the Offer Announcement.
18 July 2013
Announcement on the acquisition of 523,000 Shares by Lam Soon Cannery
Private Limited on 17 July 2013.
19 July 2013
Announcement on the despatch of offer document dated 19 July 2013 in
relation to the Offer.
Announcement on the acquisition of 260,000 Shares by Lam Soon Cannery
Private Limited on 18 July 2013.
22 July 2013
Announcement on the acquisition of 181,000 Shares by Lam Soon Cannery
Private Limited on 19 July 2013.
23 July 2013
Announcement on the acquisition of 146,000 Shares by Lam Soon Cannery
Private Limited on 22 July 2013.
24 July 2013
Announcement on the acquisition of 252,000 Shares by Lam Soon Cannery
Private Limited on 22 July 2013.
25 July 2013
Announcement on the acquisition of 1,000 Shares by Lam Soon Cannery
Private Limited on 25 July 2013.
29 July 2013
Announcement on the acquisition of 472,000 Shares by Lam Soon Cannery
Private Limited on 29 July 2013.
30 July 2013
Announcement on the acquisition of 689,000 Shares by Lam Soon Cannery
Private Limited on 30 July 2013.
1 August 2013
Announcement on the Revised Offer.
2 August 2013
Announcement on the despatch of the Supplemental Notice in relation to
the Revised Offer.
Announcement on the despatch of the circular dated 2 August 2013 in
relation to the Offer.
Source: Announcements relating to the Group on the SGX-ST
- 11 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Additional information on the traded closing prices of the Shares, volume-weighted average prices
(“VWAPs”) and average daily trading volumes for the period commencing 12 months prior to the
Offer Announcement and ending on the Latest Practicable Date is set out below:
VWAP
Premium /
(Discount) of
Final Offer
price over /
(to) VWAP
(%)
Average
daily
trading
volume(1)
Average
daily trading
volume as
percentage
of free float(2)
Periods prior to the Offer Announcement
Last 12 months
0.735
0.600
0.710
14.8
604
0.98
Last 6 months
0.715
0.655
0.694
17.4
133
0.22
Last 3 months
0.715
0.655
0.694
17.4
182
0.29
Last one month
0.715
0.655
0.691
17.9
303
0.49
Last Market Day prior to
the Offer Announcement(3)
0.715
0.715
0.709
15.0
170
0.28
Highest
closing
price
(S$)
Lowest
closing
price
(S$)
Period after the Offer Announcement and prior to the Revised Offer Announcement
After Offer Announcement
and up to the Revised
Offer Announcement
0.810
0.780
0.791
3.0
804
1.92
Last Market Day prior
to the Revised Offer
Announcement(4)
612
1.46
1,394
3.43
0.810
0.810
0.805
1.2
On the Latest Practicable Date
Latest Practicable Date
0.815
0.815
0.816
(0.1)
Source: Bloomberg L.P.
Notes:
(1)
The average daily trading volume of the Shares is calculated based on the total volume of Shares traded divided by
the number of Market Days during the relevant periods.
(2)
Free float refers to the Shares other than those held by the Directors, substantial Shareholders and their associates
(as defined in the Listing Manual) which amounts to (i) 61,757,384 Shares as at the Offer Announcement Date (for
the periods prior to the Offer Announcement), (ii) 41,834,404 Shares as at the Revised Offer Announcement Date
(for the period after the Offer Announcement and prior to the Revised Offer Announcement); and (iii) 40,622,369
Shares on the Latest Practicable Date.
(3)
This refers to the last Market Day on which the Shares were traded prior to the Offer Announcement, being 4 July
2013, before the trading halt of the Shares at 10.00 a.m. on 4 July 2013.
(4)
This refers to the last Market Day on which the Shares were traded prior to the Revised Offer Announcement, being
30 July 2013, before the trading halt of the Shares at 8.30 a.m. on 31 July 2013.
- 12 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
We note the following with regard to the Share prices:
(a)
during the 12-month period prior to the Offer Announcement, the closing prices of the
Shares ranged between a low of S$0.600 (on 6 July 2012) and a high of S$0.735 (on 16
July 2012 and 23 July 2012). The Final Offer Price represents a premium of 35.8% and
10.9% over the lowest and the highest closing prices of the Shares respectively during the
12-month period;
(b)
the Final Offer Price represents a premium of 14.8%, 17.4%, 17.4% and 17.9% over
the VWAP of the Shares for the 12-, 6-, 3- and one-month periods prior to the Offer
Announcement respectively;
(c)
the Final Offer Price represents a premium of 14.0% over the closing price of the Share of
S$0.715 on 4 July 2013, being the last Market Day on which the Shares were traded prior
to the Offer Announcement and before the trading halt of the Shares at 10.00 a.m. on 4
July 2013;
(d)
during the period after the Offer Announcement and prior to the Revised Offer
Announcement, the closing prices of the Shares ranged between a low of S$0.780 (on 8,
9, 10, 11, 12 and 15 July 2013) and a high of S$0.810 (on 30 July 2013). The Final Offer
Price represents a marginal premium of 4.5% and 0.6% over the lowest and highest closing
prices of the Shares respectively during the aforesaid period, and the Final Offer Price
represents a marginal premium of 3.0% over the VWAP of the Shares of S$0.791 over the
same period;
(e)
the Final Offer Price represents a marginal premium of 0.6% over the closing price of
S$0.810 on 30 July 2013, being the last Market Day on which the Shares were traded prior
to the Revised Offer Announcement and before the trading halt of the Shares at 8.30 a.m.
on 31 July 2013;
(f)
the Final Offer Price represents a marginal discount of 0.1% to the VWAP of the Shares of
S$0.816 on the Latest Practicable Date; and
(g)
the Final Offer Price is equivalent to the closing price of the Shares of S$0.815 on the
Latest Practicable Date.
We also note the following with regard to the trading liquidity of the Shares:
(a)
the average daily trading volume of the Shares for the 12-, 6-, 3- and one-month periods
prior to the Offer Announcement represented only 0.98%, 0.22%, 0.29% and 0.49% of the
free float respectively;
(b)
during the 12-month period prior to the Offer Announcement, the Shares were traded on
236 Market Days out of a total of 251 Market Days (or 94.0% of the total number of Market
Days during the period), with an average daily trading volume of approximately 604,000
Shares;
(c)
during the period after the Offer Announcement and prior to the Revised Offer
Announcement, the Shares were traded on all 17 Market Days out of a total of 17 Market
Days (or 100.0% of the total number of Market Days during the period), with an average
daily trading volume of approximately 804,000 Shares, representing 1.92% of the free float;
and
(d)
on the Latest Practicable Date, a total of 1,394,000 Shares were traded, representing
3.43% of the free float.
- 13 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
4.1.2 Relative performance of the Shares versus the market index
For the period commencing 12 months prior to the Offer Announcement and ending on the date of
the Offer Announcement
The chart below sets out the relative returns (daily basis) of the Shares in relation to the relative
returns (daily basis) of the FTSE Strait Times All Share Index1 (the “FSTAS Index”) for the period
commencing 12 months prior to the Offer Announcement and ending on the date of the Offer
Announcement:
Source: Bloomberg L.P.
We observe that during the aforesaid period, the Shares have generally outperformed the FSTAS
Index in relative terms except for an intermittent period in May 2013. As at 4 July 2013 (being the
last Market Day on which the Shares were traded prior to the Offer Announcement and before
the trading halt of the Shares at 10.00 a.m. on 4 July 2013), the Share price had appreciated by
19.2% while the FSTAS Index had appreciated by 6.9% over the same period.
For the period commencing on the Market Day after the Offer Announcement and ending on the
Latest Practicable Date
We have also reviewed the relative performance of the Shares against the closing prices of the
FSTAS Index on 4 July 2013 (being the last Market Day on which the Shares were traded prior to
the Offer Announcement and before the trading halt of the Shares at 10.00 a.m. on 4 July 2013)
and on the Latest Practicable Date:
Company (S$)
FSTAS Index
As at
4 July 2013
As at Latest
Practicable Date
%
change
0.715
772.30
0.815
794.70
14.0
2.9
Source: Bloomberg L.P.
We note that the Share price had appreciated by 14.0% as compared to a marginal appreciation
of 2.9% in the FSTAS Index over the aforesaid period.
1
The FSTAS Index is a modified market capitalisation weighted index comprising all companies within the top 98% by full market
capitalisation of the SGX-Mainboard universe (i.e. large-, mid- and small-capitalisation indices combined).
- 14 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Based on the above observations, it would appear that the market price of the Shares as at
the Latest Practicable Date may be supported by the Offer, the Revised Offer and purchases
by Lam Soon Cannery Private Limited since the Offer Announcement, and may or may
not be sustained at the current level prevailing as at the Latest Practicable Date after the
close of the Revised Offer. It is also observed that Lam Soon Cannery Private Limited had not
purchased Shares on 2 August 2013, being the Latest Practicable Date and the date since the
Revised Offer was announced. Shareholders should note that the past trading performance of the
Shares should not in any way be relied upon as an indication or a promise of its future trading
performance.
4.2
Book NTA, Ex-Cash book NTA and Revalued NTA of the Group
Book NTA of the Group
Based on its latest unaudited financial statements as at 31 March 2013, the unaudited NTA of
the Group as at 31 March 2013 amounted to S$105.7 million (or S$0.298 per Share based on
354,996,976 issued Shares (excluding treasury Shares) as at 31 March 2013). Accordingly, the
Final Offer Price represents a significant premium of 173.5% over the unaudited NTA per Share of
S$0.298 as at 31 March 2013.
Ex-cash book NTA of the Group
Based on its latest unaudited financial statements as at 31 March 2013, we also note that the
Group has significant cash and bank balances (net of borrowings and finance leases) of S$46.1
million, representing 43.6% of the NTA of the Group. This represents net cash of S$0.130 per
Share. Adjusting for the net cash, the ex-cash NTA of the Group as at 31 March 2013 would be
S$59.6 million, or S$0.168 per Share (the “Ex-Cash book NTA per Share”). The Final Offer Price,
after adjusting for the net cash per Share (the “Ex-Cash Offer Price”), would be S$0.685 and
represents a significant premium of 307.7% over the Ex-Cash book NTA per Share of S$0.168 as
at 31 March 2013 (the “Ex-Cash Price-to-book NTA”).
The Directors have confirmed that to the best of their knowledge and belief, save for the Revalued
Properties (as defined below), (a) they are not aware of any circumstances which may cause
the book NTA of the Group as at the Latest Practicable Date to be materially different from that
recorded in the unaudited balance sheet of the Group as at 31 March 2013; (b) there have been
no material disposals or acquisitions of assets by the Group since 31 March 2013 and up to the
Latest Practicable Date; and (c) there are no contingent liabilities or bad or doubtful debts which
are likely to have a material impact on the unaudited NTA of the Group as at 31 March 2013.
Revalued NTA of the Group
In connection with the Offer and in compliance with Rule 26 of the Code, the Company had
commissioned the Independent Valuers to conduct independent valuations of the properties owned
by the Group as at 31 March 2013 (collectively, the “Revalued Properties”), except for a 120.87
square-metre residential property located at building G, 20th floor, Yidong Mansion No 6, Bus
Station Road, Jiangan District, Wuhan, the PRC and a 163.71 square-metre office located at room
1501, No 111 Tai Kang road, Tai Kang City Plaza, Tai Fu Centre, Guangzhou, the PRC.
The aggregate unaudited net book value (“NBV”) of the Revalued Properties of S$37.0 million
as at 31 March 2013 represents 12.8% of the aggregate Revised Offer value of approximately
S$289.3 million (computed as the Final Offer Price of S$0.815 multiplied by 354,996,976 Shares
as at 31 March 2013). Further details on the Revalued Properties are set out in the valuation
summary from the Independent Valuers (the “Valuation Reports”) in Appendix 8 of the circular
dated 2 August 2013 which was despatched to Shareholders on 2 August 2013.
The bases for the independent valuations of the Revalued Properties are set out in the full reports
which are available for inspection at the registered office of the Company and involve certain
assumptions, limitations and disclaimers as stated therein. Shareholders are advised to read the
above in conjunction with the valuation reports in their entirety.
- 15 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
As set out in the Valuation Reports, the estimated aggregate market valuation of the Revalued
Properties as at 31 March 2013 is S$56.6 million. We set out below a summary of the market
values of the Revalued Properties as extracted from the Valuation Reports and the Group’s net
revaluation surplus after potential tax liabilities:
Location
Description
Market value
(S$’000)
NBV
(S$’000)
Net revaluation
surplus(1)
(S$’000)
14 Woodlands Link, Viz Branz
House, Singapore 738739
Factory cum
warehouse building
11,000
7,689
2,163
16 Woodlands Link, Singapore
738735
Factory cum
warehouse building
9,500
5,092
4,199
Plot 5A6 Jinyuan District Industrial
Estate (Land Parcel No.:83.2-61.2016), Chaoshan Road, Shantou,
Guangdong, PRC
Factory
4,328(2)
2,958
690
Plot 5A7 Jinyuan District Industrial
Estate (Land Parcel No.:83.2-61.2016), Chaoshan Road, Shantou,
Guangdong, PRC
Factory
4,326(2)
2,957
688
4A1A3 Jinyuan District Industrial
Estate, (Land Parcel No.: 106-2T3-10), Chaoshan Road, Shantou,
Guangdong, PRC
Factory
24,202(3)
15,162
5,286
Shi Ji Road, Zhongyuan Green
Food Industrial Park, Xuediar,
Xinzheng, Henan,
China Post code 451100
Factory
3,260(4)
3,149
46
37,007
13,072
TOTAL
56,616
Notes:
(1)
Net revaluation surplus is calculated as the difference between the market values as stated in the Valuation
Reports and their corresponding book values as at 31 March 2013 and net of potential tax liabilities. The potential
tax liabilities are computed by the Management assuming the hypothetical sale of the Revalued Properties at the
respective valuation amounts and applicable tax rates.
(2)
As the market valuations of the properties are in RMB, the values of the properties are converted based on the
closing exchange rate of S$1.00 : RMB4.852 as at 1 July 2013.
(3)
As the market valuation of the property is in RMB, the value of the property is converted based on the closing
exchange rate of S$1.00 : RMB4.849 as at 18 July 2013.
(4)
As the market valuation of the property is in RMB, the value of the property is converted based on the closing
exchange rate of S$1.00 : RMB4.847 as at 19 July 2013.
- 16 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
The revalued NTA (“RNTA”) of the Group as at 31 March 2013 is computed as follows:
NTA as at 31 March 2013
Add: Net revaluation surplus from
the Revalued Properties
RNTA as at 31 March 2013
Aggregate
(S$’000)
Per Share(1)
(S$)
Premium
represented by
Final Offer Price
(%)
105,690
0.298
173.5
13,072
0.037
118,762
0.335
143.3
Note:
(1)
Based on 354,996,976 issued Shares.
We note that the Final Offer Price represents a significant premium of 143.3% over the RNTA per
Share of S$0.335 as at 31 March 2013.
Shareholders should note the following:
4.3
(a)
the above analysis is provided solely for illustration purposes and in compliance with the
applicable requirements of the Code;
(b)
the RNTA is not necessarily a realisable value given that the market values of the Revalued
Properties may vary and are dependent on, inter alia, the prevailing market and economic
conditions. There is also no assurance that the eventual sale prices (if any) will be identical
to those appraised by the Independent Valuers in the Valuation Reports or that the
revaluation surpluses eventually recorded by the Group on the Revalued Properties (if any)
will be the same as indicated above; and
(c)
the potential tax liabilities have been provided pursuant to the requirement under Rule 26.3
of the Code on the assumption of a hypothetical sale of the Revalued Properties, and such
tax liabilities will not crystallise if the Group does not dispose of the Revalued Properties.
The Directors have confirmed that as at the Latest Practicable Date, the Group does not
have any plans for an impending material disposal and/or conversion of the use of the
Group’s assets and/or any material change in the nature of the Group’s businesses, and
the Group has not received any offers for the Revalued Properties at the market values set
out in the Valuation Reports. In this respect, it would appear that the likelihood of such tax
liabilities crystallising is low.
Comparison of Valuation Statistics of Companies Broadly Comparable to the Group
In order to derive a reasonable range of valuation for the purposes of assessing the financial
terms of the Revised Offer, we have referred to selected companies listed and traded on the
SGX-ST which business activities are broadly comparable with those of the Group to give an
indication of the current market expectations with regard to the perceived valuation of these
businesses.
The Group is principally engaged in the manufacturing and exporting of instant beverages and
snack food. We have, in consultation with the Management, used the following SGX-ST listed
companies which are principally engaged in the beverage, instant food and/or snacks business
with market capitalisations less than S$1.0 billion (collectively, the “Comparable Companies”).
- 17 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Details on the Comparable Companies, including their business descriptions and selected key
financial and valuation statistics, are set out below and in the annex to this letter:
(a)
Consciencefood Holdings Limited (“Consciencefood”);
(b)
Etika International Holdings Limited (“Etika”);
(c)
Food Empire Holdings Limited (“Food Empire”);
(d)
Hosen Group Ltd (“Hosen”);
(e)
Sino Grandness Food Industry Group Limited (“Sino Grandness”);
(f)
Synear Food Holdings Limited (“Synear Food”); and
(g)
Tsit Wing International Holdings Limited (“Tsit Wing”).
Shareholders should note that there is no company or group listed on any relevant stock
exchange which may be considered identical to the Group in terms of business activities, market
capitalisation, scale of operations, risk profile, geographical spread, operating and financial
leverage, accounting policies, adherence to accounting standards, tax factors, track record and
future prospects. In addition, each of the Comparable Companies may engage in other separate
business activities which are not related to the beverage, instant food and/or snack business. As
such, any comparison made herein is strictly limited in scope and merely serves as an illustrative
guide to Shareholders.
In assessing the financial terms of the Revised Offer, we have used the following valuation
parameters in our analysis:
Valuation parameter
Description
Price-earnings ratio
(“PER”)
The historical PER, which illustrates the ratio of the market price of a
company’s shares relative to its historical consolidated earnings per
share, is commonly used for the purpose of illustrating the profitability,
and hence valuation of a company.
We have considered the historical PERs of the Comparable Companies
based on their respective last transacted prices on the Latest
Practicable Date and latest full-year net earnings per share vis-à-vis
the corresponding historical PER of the Group based on the Final Offer
Price.
Ex-cash PER
In view of the significant unaudited net cash position (i.e. cash and bank
balance less borrowings and finance lease) of the Group as at 31 March
2013, we have also computed the historical PER on an ex-cash basis.
In this regard, we have considered the historical ex-cash PER of the
Comparable Companies based on their respective last transacted prices
(less net cash per share, if applicable) on the Latest Practicable Date
and latest full-year net earnings per share vis-à-vis the corresponding
historical ex-cash PER of the Group based on the Final Offer Price (less
net cash per Share).
- 18 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Valuation parameter
Description
Price-to-book NTA
ratio
An NTA-based approach is useful to illustrate the extent that the value of
each share is backed by assets, and would be more relevant in the case
where the group were to change the nature of its business or realise or
convert the use of all or most of its assets. The NTA-based valuation
approach may provide an estimate of the value of a company or group
assuming the hypothetical sale of all its assets over a reasonable period
of time at the aggregate value of the assets used in the computation of
the NTA, with the balance to be distributed to its shareholders after the
settlement of all the liabilities and obligations of the company or group.
We have considered the historical price-to-book NTA ratios of the
Comparable Companies based on their respective last transacted
prices on the Latest Practicable Date and latest available NTA per share
vis-à-vis the corresponding historical price-to-book NTA ratio of the
Group based on the Final Offer Price.
Ex-cash price-to-book
NTA ratio
In view of the significant unaudited net cash position (i.e. cash and bank
balance less borrowings and finance lease) of the Group as at 31 March
2013, we have also computed the historical price-to-book NTA ratio
on an ex-cash basis. In this regard, we have considered the historical
ex-cash price-to-book NTA ratios of the Comparable Companies based
on their respective last transacted prices (less net cash per share, if
applicable) on the Latest Practicable Date and latest available book
NTA (less net cash, if applicable) per share vis-à-vis the corresponding
historical ex-cash price-to-NTA ratio of the Group based on the Final
Offer Price (less net cash per Share) and latest available NTA per Share
(less net cash per Share).
Enterprise value to
EBITDA
(“EV/EBITDA”) ratio
The historical EV/EBITDA ratio illustrates the ratio of the market
value of a company’s business relative to its historical consolidated
pre-tax operating cashflow performance, without regard to its capital
structure, and provides an indication of current market valuation relative
to operating performance. “EV” is the sum of a company’s market
capitalisation, preferred equity, minority interests, short- and long-term
debts less cash and cash equivalents, and represents the actual cost to
acquire the entire company. “EBITDA” refers to historical consolidated
earnings before interest, tax, depreciation and amortisation expenses.
EBITDA can be used to analyse the profitability between companies as it
eliminates the effects of financing and accounting decisions.
We have considered the historical EV/EBITDA ratios of the Comparable
Companies based on their respective last transacted prices on the
Latest Practicable Date, latest available balance sheet values and latest
full-year EBITDA vis-à-vis the corresponding historical EV/EBITDA ratio
of the Group based on the Final Offer Price.
- 19 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
The following table sets out the comparative valuation statistics of the Comparable Companies
vis-à-vis the Group as implied by the Final Offer Price:
Company
Consciencefood
Etika
Food Empire
Hosen
Sino Grandness(2)
Synear Food(3)
Tsit Wing(4)
Historical PER
(times)
Historical
price-to-book
NTA ratio
(times)
Historical
EV/EBITDA ratio
(times)
6.13
23.12
13.65
42.69
6.63
18.68
17.91
0.84
2.11(1)
1.85
0.87
2.08
0.39
1.34
2.37
12.49
10.40
17.90
5.32
3.55
8.30
High
Mean
Median
Low
42.69
14.35(5)
15.78(5)
6.13
2.11
1.35
1.34
0.39
17.90
8.62
8.30
2.37
Group
17.08
2.74
9.74
Source: Bloomberg L.P., annual reports and/or announcements of the respective companies and SAC Capital’s
computations
Notes:
(1)
Based on the net asset value of the group.
(2)
On 1 July 2013, the board of directors of Sino Grandness announced that the Company had on 28 June 2013
obtained a no-objection letter from the SGX-ST for the spin-off of its beverage business segment for a listing on an
internationally recognised stock exchange.
(3)
On 15 October 2012, Synear Food and Fortune Domain Limited jointly announced a delisting proposal to seek the
voluntary delisting of the Company from the SGX-ST at an exit offer price of S$0.186 per share.
(4)
On 11 June 2013, DBS Bank announced, for and on behalf of Hero Valour Limited, a mandatory conditional cash
offer to acquire all the issued and paid-up ordinary shares in the capital of Tsit Wing at an offer price of S$0.3075 in
cash per share.
(5)
Being an outlier, Hosen has been excluded from the computation of the mean and median historical PER.
Historical PER comparison
We note that the historical PER of 17.08 times of the Group as implied by the Final Offer Price is:
(a)
within the range of historical PERs of the Comparable Companies of between 6.13 times
and 42.69 times; and
(b)
at a premium of 19.0% and 8.2% over the mean and median historical PERs of the
Comparable Companies of 14.35 times and 15.78 times respectively.
- 20 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Historical price-to-book NTA comparison
We note that the historical price-to-book NTA ratio of 2.74 times of the Group as implied by the
Final Offer Price is:
(a)
above the range of historical price-to-book NTA ratios of the Comparable Companies of
between 0.39 times and 2.11 times; and
(b)
at a significant premium of 103.0% and 104.5% over the mean and median historical
price-to-book NTA ratios of the Comparable Companies of 1.35 times and 1.34 times
respectively.
Historical EV/EBITDA comparison
We note that the historical EV/EBITDA ratio of 9.74 times of the Group as implied by the Final
Offer Price is:
(a)
within the range of historical EV/EBITDA ratios of the Comparable Companies of between
2.37 times and 17.90 times; and
(b)
at a premium of 13.0% and 17.3% over the mean and median historical EV/EBITDA ratios
of the Comparable Companies of 8.62 times and 8.30 times respectively.
As set out in section 4.2 above, we note from the unaudited balance sheet of the Group as at 31
March 2013 that the Group was in a net cash position of S$46.1 million, representing 43.6% of the
NTA of the Group. In view thereof, we have also considered the PER and NTA of the Comparable
Companies on ex-cash basis vis-à-vis the Group as implied by the Ex-Cash Offer Price:
Historical
ex-cash PER
(times)
Company
Consciencefood
Etika
Food Empire
Hosen
Sino Grandness
Synear Food
Tsit Wing
Historical ex-cash
price-to-book NTA ratio
(times)
3.45
23.12(1)
12.28
42.69(1)
6.63(1)
10.57
17.49
0.75
2.11(1)
2.04
0.87(1)
2.08(1)
0.27
1.35
High
Mean
Median
Low
42.69
12.26(2)
11.43(2)
3.45
2.11
1.35
1.35
0.27
Group
14.35
4.08
Notes:
(1)
Historical ex-cash PER and historical ex-cash price-to-book NTA ratios were not relevant as these companies were
in a net-borrowings position. Accordingly, the historical PER and historical price-to-book NTA ratios were used.
(2)
Being an outlier, Hosen has been excluded from the computation of the mean and median historical ex-cash PER.
- 21 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Historical ex-cash PER comparison
We note that the historical Ex-Cash PER of 14.35 times of the Group as implied by the Ex-Cash
Offer Price is:
(a)
within the range of historical ex-cash PERs of the Comparable Companies of between 3.45
times and 42.69 times; and
(b)
at a premium of 17.0% and 25.5% over the mean and median historical ex-cash PERs of
the Comparable Companies of 12.26 times and 11.43 times respectively.
Historical ex-cash price-to-book NTA comparison
We note that the historical Ex-Cash Price-to-book NTA ratio of 4.08 times of the Group as implied
by the Ex-Cash Offer Price is:
4.4.
(a)
above the range of historical ex-cash price-to-book NTA ratios of the Comparable
Companies of between 0.27 times and 2.11 times; and
(b)
at a significant premium of 202.2% and 202.2% over the mean and median historical
ex-cash price-to-book NTA ratios of the Comparable Companies of 1.35 times and 1.35
times respectively.
Comparison with Recent Successful Privatisation Transactions and Delisting Offers of
Companies Listed on the SGX-ST
We note that as set out in paragraph 13 of the Offer Document, the Offeror intends to make the
Company its wholly-owned subsidiary and does not intend to preserve the listing status of the
Company. Accordingly, the Offeror when entitled, intends to exercise its rights of compulsory
acquisition under Section 215(1) of the Companies Act and does not intend to take steps for any
trading suspension of the Shares by the SGX-ST to be lifted in the event that, inter alia, less than
10% of the total number of issued Shares (excluding any Shares held by the Company as treasury
Shares) are held in public hands.
In view of the above and for the purposes of providing an illustrative guide as to the attractiveness
of the Final Offer Price relative to other take-over transactions, we have compared the financial
terms of the Revised Offer with (a) selected recent successful privatisation transactions
announced during the 12-month period prior to the Offer Announcement, whether by way of a
general offer under the Code or a scheme of arrangement under Section 210 of the Companies
Act where the offeror has stated its intentions to delist the target company from the Official List
of the SGX-ST; and (b) selected recent completed delisting offers under Rule 1307 of the Listing
Manual announced during the 12-month period prior to the Offer Announcement (collectively, the
“Take-over Transactions”). As some of the Take-over Transactions had undertaken revaluations
and/or adjustments to their assets which may have a material impact on their last announced book
values, we have also, where relevant, compared the financial terms of such offer transactions
with the revalued NAV (or revalued NTA where applicable) and/or adjusted NAV (or adjusted NTA
where applicable) of the Take-over Transactions where available.
We wish to highlight that the Take-over Transactions set out below are by no means exhaustive.
In addition, as the Group is not directly comparable to the target companies involved in the
Take-over Transactions in terms of business activities, scale of operations, market capitalisation,
geographical spread, risk profile, accounting policies, financial performance, operating and
financial leverage, track record and future prospects, the comparison merely serves as a general
guide to provide an indication of the premia/discounts paid in connection with the privatisation/
delisting of companies listed on the SGX-ST. Each of the Take-over Transactions must be
judged on its own commercial and financial merits. Shareholders should also note that the
premium (if any) to be paid by an offeror in a privatisation/delisting transaction varies in different
circumstances depending on, inter alia, the attractiveness of the underlying business to be
acquired, the synergies to be gained from integration with an existing business, the trading liquidity
of the target company’s shares, prevailing market expectations and the presence of competing
bids. Accordingly, any comparison made herein is strictly limited in scope.
- 22 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Company
Nature of
transaction
Hup Soon Global
Corporation Limited
Privatisation
Cerebos Pacific
Limited
Offer price
per share
(S$)
Date of
announcement
Premium of
offer price over
last transacted
price prior to
Offer
announcement price-to-NTA
of offer
ratio
(%)
(times)
26 July 2012
0.100
0.0
0.54
Delisting
1 August 2012
6.600
22.7
2.16
Hersing Corporation
Ltd
Privatisation
8 August 2012
0.230
21.1
1.09
Sakari Resources
Limited
Privatisation
27 August 2012
1.8751(1)
25.8(2)
2.80
Luye Pharma Group
Ltd.
Privatisation
28 August 2012
1.300
16.1(3)
2.31
Gul Technologies
Singapore Ltd
Delisting
23 September 2012
0.162
38.5(4)
1.78
Kian Ann Engineering
Ltd
Privatisation
15 October 2012
0.440
46.7(5)
1.00
Harry’s Holding Ltd.
Privatisation
10 November 2012
0.230
53.3
1.50
(6)
(7)
53.00
52.8
10.67
Asia Pacific Breweries
Limited
Privatisation 15 November 2012
China Farm
Equipment Limited
Privatisation
3 December 2012
0.280
7.7
1.06
SC Global
Developments Ltd
Privatisation
5 December 2012
1.800
49.4
0.83
Kinergy Ltd
Privatisation
14 December 2012
0.250
38.9
0.66
Rokko Holdings Ltd.
Privatisation
17 December 2012
0.110
57.1
0.56
PCA Technology
Limited
Privatisation
1 February 2013
0.150
11.1
0.77
WBL Corporation
Limited
Privatisation
13 May 2013(8)
4.500
28.9
1.29
Pan Pacific Hotels
Group Limited(9)
Delisting
10 May 2013
2.550
9.0
0.95
Tsit Wing
International Holdings
Limited
Privatisation
11 June 2013
0.3075
36.7
1.05
High
Mean
Median
Low
57.1
30.3
28.9
0.0
10.67
1.27(10)
1.06(10)
0.54
Company
Privatisation
5 July 2013(11)
0.815
14.0(12)
2.74/2.43(13)
Company
Privatisation
1 August 2013(14)
0.815
0.6(15)
2.74/2.43(13)
Source: Announcements and circulars to shareholders in relation to the respective Take-over Transactions and SAC
Capital’s computations
- 23 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
Notes:
(1)
Being the offer price of S$1.90 less dividends of S$0.0249 (the “Sakari Net Offer Price”) as (i) the dividend was
announced prior to the announcement of the voluntary conditional cash offer for shares in Sakari Resources Limited;
and (ii) the settlement date in respect of the offer shares tendered in acceptance of the offer falls after the record
date of the dividend.
(2)
The market premium in the table above was computed based on the Sakari Net Offer Price of S$1.8751 and the last
transacted price prior to its announcement of the voluntary conditional cash offer.
(3)
On 30 July 2012 (the “Luye Trading Suspension Date”), the trading prices and volume of Luye Pharma Group Ltd
(“Luye Pharma”) surged in the morning of 30 July 2012 and last traded at S$1.25 before Luye Pharma suspended
the trading of its shares. On the same day, Luye Pharma announced that Luye Pharmaceutical Investment Co., Ltd.
(“LPIC”) acquired 15.22% of the shares in Luye Pharma, bringing its total interest to 92.63% and that the shares
held in public hands had fallen to below 10%. The market premium in the table above was computed based on the
offer price of S$1.30 and the last transacted price of S$1.12 on the Market Day prior to the Luye Trading Suspension
Date. The offer price of S$1.30 would represent a premium of 4.0% over the last transacted price of S$1.25 prior to
its offer announcement date.
(4)
On 13 September 2012, Gul Technologies Singapore Ltd (“Gul Technologies”) announced a holding announcement
that it was aware that a party was exploring certain corporate action that may or may not lead to an offer for
Gul Technologies (the “Gul Holding Announcement”). On 23 September 2012, Gul Technologies and the
offeror released a joint announcement for the delisting proposal of Gul Technologies (the “Delisting Proposal
Announcement”). The market premium in the table above was computed based on the offer price of S$0.162
and the last transacted price of S$0.117 prior to the Gul Holding Announcement. The offer price of S$0.162
would represent no premium or discount to the last transacted price of S$0.162 prior to the Delisting Proposal
Announcement.
(5)
On 17 August 2012 (the “Kian Ann Holding Announcement Date”), Kian Ann Engineering Ltd (“Kian Ann”)
announced a holding announcement that it had been approached by a party in relation to a possible transaction
involving the shares in the company and there is no assurance that any definitive or binding agreements or any
transaction will result from such discussions. On 15 October 2012, Kian Ann and the offeror jointly announced the
proposed acquisition of the company by the offeror to be effected by way of a scheme of arrangement under Section
210 of the Companies Act. The market premium in the table above was computed based on the offer price of S$0.44
and the last transacted price of S$0.30 prior to the Kian Ann Holding Announcement Date. The offer price of S$0.44
would represent a premium of 7.3% over the last transacted price of S$0.41 prior to its offer announcement date.
(6)
On 18 August 2012 (the “Heineken Pre-Conditional Offer Announcement Date”), Credit Suisse (Singapore)
Limited and Citigroup Global Markets Singapore Pte. Ltd. (collectively, the “Heineken Financial Advisers”)
announced, for and on behalf of Heineken International B.V. (“Heineken”), that Heineken had entered into two
conditional sale and purchase agreement with Fraser and Neave Limited (“F&NL”) for acquisition of shares (the
“APB Share Acquisition”) in Asia Pacific Breweries Limited (“APB”). On 15 November 2012 (the “Heineken
Offer Announcement Date”), the Heineken Financial Advisers announced, for and on behalf of Heineken, of the
completion of the APB Share Acquisition and the mandatory unconditional offer for the shares in APB.
(7)
On 16 July 2012, APB announced that Oversea-Chinese Banking Corporation Limited (“OCBC”) and Great Eastern
Holdings Limited (“GEH”) were approached with an offer to purchase, inter alia, their combined stakes in APB (the
“OCBC and GEH Announcement”). The market premium in the above table was computed based on the offer price
of S$53.00 and the last transacted price of S$34.69 prior to the OCBC and GEH Announcement. The offer price of
S$53.00 would represent a premium of 4.8% and 0.8% over the last transacted prices of S$50.57 and S$52.60 prior
to the Heineken Pre-conditional Offer Announcement Date and the Heineken Offer Announcement Date respectively.
(8)
On 26 November 2012 (the “STC Offer Announcement Date”), Standard Chartered Bank announced, for and on
behalf of Straits Trading Company Limited (“STC”), the possible mandatory conditional offer (the “STC Offer”) for all
the stock units of WBL Corporation Limited (“WBL Corporation”). On 30 January 2013 (the “UE Pre-conditional
Offer Announcement Date”), J.P. Morgan (S.E.A) Limited (“JPM”) announced, for and on behalf of UE Centennial
Venture Pte. Ltd. (“UE Offeror”), the pre-conditional voluntary offer for all stock units in WBL Corporation (the “UE
Pre-conditional Offer”) at a price of S$4.00 in cash per offer stock unit. The lapse of STC Offer was subsequently
announced on 4 March 2013. On 9 May 2013 (the “UE Offer Announcement Date”), JPM announced that UE
Offeror revised the stock unit offer price to S$4.50. On 13 May 2013, JPM announced that the UE Pre-conditional
Offer has become and have been declared unconditional in all respects. The market premium in the table above
was computed based on the offer price of S$4.50 and the last transacted price of S$3.49 prior to the STC Offer
Announcement Date. The offer price of S$4.50 would represent a premium of 7.1% and 0% over the last
transacted price of S$4.20 and S$4.50 prior to the UE Pre-conditional Offer Announcement Date and the UE Offer
Announcement Date. As at the closing date of the offer, UE Offeror and its concert parties owned, controlled or have
agreed to acquire stock units representing 96.31% of the total number of issued stock units. Whilst WBL has not
been delisted from the SGX-ST as at the Latest Practicable Date, UE Offeror had stated that it has no intention to
undertake or support any action for any listing suspension to be lifted.
(9)
Whilst Pan Pacific Hotels Group Limited (“Pan Pacific”) has not been delisted from the SGX-ST as at the Latest
Practicable Date, the delisting resolution was duly passed on 30 July 2013 at the extraordinary general meeting as
announced on 30 July 2013.
- 24 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
(10)
Being an outlier, Asia Pacific Breweries Limited has been excluded from the computation of the mean and median
offer price-to-NTA ratio.
(11)
Based on the Offer Announcement Date.
(12)
Based on the Final Offer Price of S$0.815 and the last transacted price of the Share of S$0.715 on 4 July 2013,
being the last Market Day on which the Shares were traded prior to the Offer Announcement and before the trading
halt of the Shares at 10.00 a.m. on 4 July 2013.
(13)
Being the Final Offer Price-to-RNTA ratio.
(14)
Based on the Revised Offer Announcement Date.
(15)
Based on the Final Offer Price of S$0.815 and the last transacted price of the Share of S$0.810 on 30 July 2013,
being the last Market Day on which the Shares were traded prior to the Revised Offer Announcement and before the
trading halt of the Shares at 8.30 a.m. on 31 July 2013.
We note that in respect of the Take-over Transactions:
(a)
(b)
(c)
(d)
the premium of the Final Offer Price over the last transacted price of the Shares prior to the
Offer Announcement of 14.0% is:
(i)
within the range of the corresponding premia of the Take-over Transactions of
between 0.0% and 57.1%; and
(ii)
below the corresponding mean and median premia of 30.3% and 28.9% of the
Take-over Transactions respectively;
the premium of the Final Offer Price over the last transacted price of the Shares prior to the
Revised Offer Announcement of 0.6% is:
(i)
within the range of the corresponding premia of the Take-over Transactions of
between 0.0% and 57.1%; and
(ii)
below the corresponding mean and median premia of 30.3% and 28.9% of the
Take-over Transactions respectively;
the price-to-NTA ratio as implied by the Final Offer Price of 2.74 times is:
(i)
within the range of corresponding price-to-NTA ratios of the Take-over Transactions
of between 0.54 times and 10.67 times; and
(ii)
at a significant premium of 115.7% and 158.5% over the corresponding mean and
median price-to-NTA ratios of the Take-over Transactions of 1.27 times and 1.06
times respectively; and
the price-to-RNTA ratio as implied by the Final Offer Price of 2.43 times is:
(i)
within the range of corresponding price-to-NTA ratios of the Take-over Transactions
of between 0.54 times and 10.67 times; and
(ii)
at a significant premium of 91.3% and 129.2% over the corresponding mean and
median price-to-NTA ratios of the Take-over Transactions of 1.27 times and 1.06
times respectively.
- 25 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
4.5.
Other Relevant Considerations
4.5.1 Historical financial performance and condition of the Group
The salient financial information on the Group for the financial years ended 30 June 2010
(“FY2010”), FY2011, FY2012, 9M2012 and 9M2013 is set out below:
Income statement
(S$’000)
FY2010
Audited
FY2011
FY2012
Unaudited
9M2012
9M2013
Revenue
Gross profit
Profit before tax
Profit attributable to of the
Company
152,747
54,526
20,317
165,675
52,494
17,766
172,726
58,952
25,206
134,212
44,734
19,538
128,856
48,916
21,111
13,772
11,492
16,965
13,623
14,178
Balance sheet
Audited as at 30 June
2010
2011
2012
(S$’000)
Current assets
Current liabilities
Working capital
Non-current assets
Non-current liabilities
Equity attributable to owners of the
Company
Unaudited
1 March 2013
93,325
39,572
53,753
47,212
10,679
98,960
42,499
56,461
45,619
7,865
112,764
52,326
60,438
42,885
6,780
131,578
59,116
72,462
42,132
6,917
88,761
92,773
94,870
105,781
Cash flow statement
(S$’000)
Net cash flows from operating
activities
Net cash flows used in
investing activities
Net cash flows used in
financing activities
Net increase in cash and
cash equivalents
Cash and cash equivalents
at end of financial year/period
FY2010
Audited
FY2011
FY2012
Unaudited
9M2012
9M2013
8,295
19,121
25,809
19,160
(1,870)
(1,708)
(585)
(254)
(1,437)
(4,011)
(10,280)
(19,164)
(18,613)
(5,829)
2,414
7,133
6,060
293
13,086
26,608
33,741
39,801
34,034
52,887
20,352
Source: Annual report of the Company for FY2011 and FY2012 and announcement of the Group’s unaudited financial
statements for 9M2013
- 26 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
We note the following:
(a)
The Group’s revenue increased by 8.5% from S$152.7 million in FY2010 to S$165.7 million
in FY2011, mainly due to higher sales turnover of instant beverages and snack food. The
Group’s revenue increased by 4.2% from S$165.7 million in FY2011 to S$172.7 million in
FY2012, mainly due to increased sales turnover of all its 3 business segments of instant
beverages, snack food and flexible packaging and printing businesses. Profit attributable
to owners of the Company decreased by 16.7% from S$13.8 million in FY2010 to S$11.5
million in FY2011, mainly due to rising raw material prices and strengthening of the
Singapore dollar against the US dollar and Renminbi. Profit attributable to owners of the
Company increased by 47.8% from S$11.5 million in FY2011 to S$17.0 million in FY2012,
mainly due to improved gross profit margin as a result of the higher sales volume and
selling price, a more stable foreign exchange environment and management controlling its
cost of sales;
(b)
The Group’s revenue decreased by 3.9% from S$134.2 million in 9M2012 to S$128.9
million in 9M2013, mainly due to an overall decrease in sales across all its business
segments. Profit attributable to owners of the Company increased by 4.4% from S$13.6
million in 9M2012 to S$14.2 million in 9M2013, mainly due to improved gross profit margin
as a result of an increase in selling prices, reduction in material prices, efficient inventory
control and favourable product sale mix;
(c)
The Group’s working capital had generally been increasing from S$53.8 million as at 30
June 2010 to S$72.5 million as at 31 March 2013;
(d)
Shareholders’ equity had generally been increasing from S$88.8 million as at 30 June 2010
to S$105.8 million as at 31 March 2013;
(e)
The Group has recorded net cashflows from operating activities of between S$8.3
million and S$25.8 million, for each of FY2010, FY2011, FY2012, 9M2012 and 9M2013
respectively. In respect of cashflow from investing activities, the Group utilised between
S$0.3 million and S$1.9 million for each of FY2010, FY2011, FY2012, 9M2012 and
9M2013 respectively. In respect of cashflows from financing activities, the Group utilised
between S$4.0 million and S$19.2 million for each of FY2010, FY2011, FY2012, 9M2012
and 9M2013 respectively; and
(f)
The Group’s cash and cash equivalents had generally been increasing from S$26.6 million
in FY2010 to S$52.9 million in 9M2013.
We also note that the following statement on the significant trends and competitive conditions
of the industry the Group operates for the next 12 months was made in its unaudited 9M2013
financial results announcement on 13 May 2013:
“The major markets that we operate in have become more competitive and challenging. As a
result, advertising and promotion expenses may increase in future in order to maintain our market
share. Additionally, any slow down in economic growth of these markets will have an impact on our
performance.
Our ability to increase selling prices and fluctuation in raw material prices; US Dollar and Renminbi
against Singapore Dollar will continue to have an impact on the Group’s performance.”
- 27 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
4.5.2 Limitation on subsequent offers by the Offeror
Pursuant to Rule 33.2 of the Code, neither the Offeror nor any person acting in concert with it may
(except with the consent of the SIC), within 6 months of the Revised Closing Date, make a second
offer to or acquire any Shares from any Shareholder on terms better than those made available
under the current Revised Offer.
Shareholders should also note that as the Offeror owns more than 50% of the voting rights of the
Company, the Offeror Concert Group will be free to increase their shareholding in the Company
in accordance with the Code after the close of the Revised Offer without incurring a take-over
obligation.
4.5.3 The Revised Offer is already unconditional
As at the Latest Practicable Date, the Offeror Concert Group owns, control or has agreed to
acquire an aggregate of 227,023,707 Shares (representing approximately 63.95% of the existing
issued Share capital of the Company). Accordingly, as at the Latest Practicable Date, the Revised
Offer is unconditional. As such, Shareholders who accept the Offer and the Revised Offer are
assumed of receiving the Final Offer Price in respect of all their acceptances of the Offer and the
Revised Offer with no transaction costs involved.
As at the Latest Practicable Date, the Offeror Concert Group would be in a position to significantly
influence, inter alia, the management, operating and financial policies of the Group and is in a
position to be able to pass all ordinary resolutions on matters in which the Offeror Concert Group
does not have an interest and which are tabled for Shareholders’ approval at a general meeting.
4.5.4 Comparison to sale price in a recent share sale exercise
On 8 October 2012, the Company announced that Mr Ben Chng Beng Beng had disposed of
57,000,000 Shares to Lam Soon Cannery Private Limited at a sale price of S$0.735 per Share.
The Final Offer Price of S$0.815 is at a premium of 10.9% as compared to the purchase price
made by Lam Soon Cannery Private Limited.
Prior to the Latest Practicable Date, the Company announced that Lam Soon Cannery Private
Limited purchased Shares in the Company at average prices of between S$0.78985 and S$0.795.
The Final Offer Price represents a marginal premium of between 2.5% and 3.2% over the average
prices paid by Lam Soon Cannery Private Limited. As at the Latest Practicable Date, Lam Soon
Cannery Private Limited owns 20.78% of the Shares.
4.5.5 Comparison with invitation price at initial public offering and dividend payouts
We note that the invitation price of the Company at its intitial public offering is S$0.22 per invitation
share (the “IPO Price”) on June 2002. Adjusted for the share split exercise of every 1 ordinary
share in the capital of the Company into 2 Shares, undertaken by the Company in September
2010, the adjusted IPO Price would be S$0.11 (the “Adjusted IPO Price”). Accordingly, the Final
Offer Price of S$0.815 is at a significant premium of S$0.705 (or 640.9%) over the Adjusted IPO
Price.
- 28 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
We further note that the Company has been consistent in paying an annual dividend since its
listing, further details of which are set out below:
Financial year
FY2002(2)
FY2003(2)
FY2004(2)
FY2005(2)
FY2006(2)
FY2007(2)
FY2008(2)
FY2009(3)
FY2010
FY2011
FY2012
FY2013
Total
Dividend per Share
(cents)(1)
0.1000
0.1000
0.1400
0.1500
0.1250
0.7500
0.7500
0.5000
2.0000
2.2500
3.3000
1.0000
11.1650
Notes:
(1)
Dividend per Share information was provided by the Company. The dividend per Share prior to the date of share split
has been adjusted for the share split exercise.
(2)
Refers to the respective financial year ended 31 December.
(3)
The financial year end was changed from 31 December to 30 June. For FY2009, the financial year was based from
the period of 1 January 2009 to 30 June 2009.
Accordingly, a Shareholder who has held the Shares since its listing in June 2002 and up to June
2013 would, taking into account the Final Offer Price, recognise a return of 92.665 cents (including
dividends received, but not taking into account any applicable taxes, brokerage and commissions).
This would translate into a compounded annual rate of return of approximately 21.38% over the
period.
Shareholders should note that the past dividend payouts by the Company should not in any
way be relied upon as an indication or a promise of its future dividend payouts. The Directors
have confirmed that the Company does not have a fixed dividend policy and that they had
recommended the past dividends payouts after taking into consideration, inter alia, the Company’s
cash and financial position, working capital requirements and future expansion.
4.5.6 No intention to further revise the Revised Offer
We note that the Offeror has stated in the Revised Offer Announcement that it has no intention to
further revise the Final Offer Price.
- 29 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
4.5.7 Compulsory acquisition and listing status of the Company
Compulsory acquisition
Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror receives valid
acceptances pursuant to the Revised Offer in respect of not less than 90% of the total number
of issued Shares (other than those already held by the Offeror, its related corporations or their
respective nominees as at the date of the Offer and excluding treasury Shares), the Offeror would
be entitled to compulsorily acquire all the Offer Shares from Shareholders who have not accepted
the Revised Offer after the Offeror has received valid acceptances in respect of not less than 90%
of the Offer Shares (the “Dissenting Shareholders”) on the same terms as those offered under
the Revised Offer. In such an event, the Offeror intends to exercise its rights of compulsory
acquisition and the Company will become a wholly-owned subsidiary of the Offeror upon
the completion of such compulsory acquisition.
In addition, the Dissenting Shareholders have the right under and subject to Section 215(3) of
the Companies Act, to require the Offeror to acquire their Shares at the Final Offer Price in the
event that the Offeror, its related corporations or their respective nominees acquire, pursuant to
the Revised Offer, such number of Shares which, together with the Shares held by the Offeror, its
related corporations or their respective nominees, comprise 90% or more of the total number of
issued Shares (excluding treasury Shares). Shareholders who wish to exercise such a right are
advised to seek their own independent legal advice.
Listing status
Shareholders should note that, as set out in paragraph 13 of the Offer Document, pursuant to Rule
1105 of the Listing Manual, in the event that the Offeror Concert Group, as a result of the Revised
Offer or otherwise, own or control more than 90% of the total number of issued Shares (excluding
any treasury Shares), the SGX-ST may suspend the trading of the Shares on the SGX-ST until
it is satisfied that at least 10% of the total number of issued Shares (excluding treasury Shares)
are held by at least 500 Shareholders who are members of the public. Under Rule 1303(1) of the
Listing Manual, where the Offeror succeeds in garnering acceptances exceeding 90% of the total
number of issued Shares (excluding treasury Shares), thus causing the percentage of the total
number of issued Shares (excluding treasury Shares) held in public hands to fall below 10%, the
SGX-ST will suspend trading of the Shares only at the close of the Revised Offer.
In addition, pursuant to Rule 724 of the Listing Manual, if the percentage of the total number of
issued Shares (excluding treasury Shares) held in public hands falls below 10%, the Company
must, as soon as practicable, announce that fact and the SGX-ST may suspend the trading of all
the Shares. Rule 724 of the Listing Manual further states that the SGX-ST may allow the Company
a period of 3 months, or such longer period as the SGX-ST may agree, to raise the percentage
of the Shares held in public hands to at least 10%, failing which the Company may be delisted.
It is the intention of the Offeror to make the Company its wholly-owned subsidiary and
to delist the Company from the SGX-ST. It is therefore not the intention of the Offeror to
preserve the listing status of the Company and in the event that the trading of Shares on
the SGX-ST is suspended pursuant to Rule 724, Rule 1105 or Rule 1303(1) of the Listing
Manual, the Offeror does not intend to undertake or support any action for any such trading
suspension to be lifted by the SGX-ST.
Shareholders should note that as at the Latest Practicable Date, there is no assurance that, (i)
the Offeror would be in a position to exercise their rights to compulsory acquisition under Section
215(1) of the Act; (ii) Shareholders would be in a position to require the Offeror to acquire their
Shares under Section 215(3) of the Act; or (iii) there would remain a sufficient public float in the
Shares to maintain the listing status of the Shares.
- 30 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
As at the Latest Practicable Date, the shareholdings of (i) the Offeror Concert Group, (ii) the
Directors, and (iii) the substantial shareholder of the Company and their associates in aggregate
amount to 314,374,607 Shares, representing approximately 88.56% of the Shares. Accordingly,
the free float2 would constitute approximately 11.44% of the Shares. Shareholders should note that
the free float may fall below 10% should there be any acquisitions (whether through acceptances
arising from the Revised Offer or otherwise) by any of these parties of more than 5,122,671
Shares (in aggregate), representing approximately 1.44% of the Shares.
4.5.8 Absence of alternative take-over offers from third parties
As at the Latest Practicable Date, other than the Offer and the Revised Offer, there is no publicly
available evidence of an alternative take-over offer for the Shares from any third party. Further,
the Directors have confirmed that as at the Latest Practicable Date, apart from the Offer and the
Revised Offer, they have not received any other offer from any other party.
5.
OUR OPINION AND ADVICE
In arriving at our advice in respect of the Revised Offer, we have taken into account, inter alia, the
following key considerations:
(a)
an assessment of the market quotation and trading liquidity of the Shares as follows:
(i)
2
in relation to the Share prices:
(aa)
the Final Offer Price represents a premium of 35.8% and 10.9% over the
lowest and the highest closing prices of the Shares respectively during the
12-month period prior to the Offer Announcement;
(bb)
the Final Offer Price represents a premium of 14.8%, 17.4%, 17.4% and
17.9% over the VWAP of the Shares for the 12-, 6-, 3- and one-month
periods prior to the Offer Announcement respectively;
(cc)
the Final Offer Price represents a premium of 14.0% over the closing price
of S$0.715 on 4 July 2013, being the last Market Day on which the Shares
were traded prior to the Offer Announcement and before the trading halt of
the Shares at 10.00 a.m. on 4 July 2013;
(dd)
the Final Offer Price represents a marginal premium of 4.5% and 0.6%
over the lowest and highest closing prices of the Shares respectively during
the period after the Offer Announcement and prior to the Revised Offer
Announcement, and the Final Offer Price represents a marginal premium of
3.0% over the VWAP of the Shares of S$0.791 over the same period;
(ee)
the Final Offer Price represents a marginal premium of 0.6% over the closing
price of S$0.810 on 30 July 2013, being the last Market Day on which the
Shares were traded prior to the Revised Offer Announcement and before the
trading halt of the Shares at 8.30 a.m. on 31 July 2013;
(ff)
the Final Offer Price represents a marginal discount of 0.1% to the VWAP of
the Shares of S$0.816 on the Latest Practicable Date; and
(gg)
the Final Offer Price is equivalent to the closing price of the Shares of
S$0.815 on the Latest Practicable Date;
Free float refers to the Shares other than those held by the Directors, substantial Shareholders and their associates (as defined in
the Listing Manual).
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LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
(ii)
(iii)
(b)
in relation to the trading liquidity of the Shares:
(aa)
the average daily trading volume of the Shares for the 12-, 6-, 3- and
one-month periods prior to the Offer Announcement represented only 0.98%,
0.22%, 0.29% and 0.49% of the free float respectively;
(bb)
during the 12-month period prior to the Offer Announcement, the Shares
were traded on 236 Market Days out of a total of 251 Market Days (or 94.0%
of the total number of Market Days during the period), with an average daily
trading volume of approximately 604,000 Shares;
(cc)
during the period after the Offer Announcement and prior to the Revised
Offer Announcement, the Shares were traded on all 17 Market Days out of a
total of 17 Market Days (or 100.0% of the total number of Market Days during
the period), with an average daily trading volume of approximately 804,000
Shares, representing 1.92% of the free float; and
(dd)
on the Latest Practicable Date, a total of 1,394,000 Shares were traded,
representing 3.43% of the free float;
in relation to the relative performance of the Shares versus the FSTAS Index:
(aa)
the Shares having generally outperformed the FSTAS Index in relative terms
during the period commencing 12 months prior to the Offer Announcement
and ending on the date of the Offer Announcement except for an intermittent
period in May 2013;
(bb)
the Share price having appreciated by 14.0% as compared to a marginal
appreciation of 2.9% in the FSTAS Index during the period from 4 July 2013
(being the last Market Day on which the Shares were traded prior to the Offer
Announcement and before the trading halt of the Shares at 10.00 a.m. on 4
July 2013) to the Latest Practicable Date; and
(cc)
the market price of the Shares as at the Latest Practicable Date may be
appeared to be supported by the Offer, the Revised Offer and purchases
by Lam Soon Cannery Private Limited since the Offer Announcement, and
may or may not be sustained at the current level prevailing as at the Latest
Practicable Date after the close of the Revised Offer. It is also observed that
Lam Soon Cannery Private Limited had not purchased Shares on 2 August
2013, being the Latest Practicable Date and the date since the Revised Offer
was announced;
a comparison with the book NTA, Ex-Cash Price-to-book NTA and RNTA of the Group as
follows:
(i)
the Final Offer Price representing a significant premium of 173.5% over the
unaudited NTA per Share of S$0.298 as at 31 March 2013;
(ii)
the Ex-Cash Offer Price representing a significant premium of 307.7% over the
Ex-Cash Price-to-book NTA per Share of S$0.168 as at 31 March 2013; and
(iii)
the Final Offer Price representing a significant premium of 143.3% over the RNTA
per Share of S$0.335 as at 31 March 2013;
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LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
(c)
(d)
(e)
a comparison with the valuation statistics of the Comparable Companies as follows:
(i)
the historical PER of 17.08 times of the Group as implied by the Final Offer Price
being (aa) within the range of historical PERs of the Comparable Companies of
between 6.13 times and 42.69 times; and (bb) at a premium of 19.0% and 8.2%
over the mean and median historical PERs of the Comparable Companies of 14.35
times and 15.78 times respectively;
(ii)
the historical price-to-book NTA ratio of 2.74 times of the Group as implied by the
Final Offer Price being (aa) above the range of historical price-to-book NTA ratios
of the Comparable Companies of between 0.39 times and 2.11 times; and (bb) at
a significant premium of 103.0% and 104.5% over the mean and median historical
price-to-book NTA ratios of the Comparable Companies of 1.35 times and 1.34
times respectively; and
(iii)
the historical EV/EBITDA ratio of 9.74 times of the Group as implied by the Final
Offer Price being (aa) within the range of historical EV/EBITDA ratios of the
Comparable Companies of between 2.37 times and 17.90 times; and (bb) at a
premium of 13.0% and 17.3% over the mean and median historical EV/EBITDA
ratios of the Comparable Companies of 8.62 times and 8.30 times respectively;
a comparison with the valuation statistics of the Comparable Companies on the ex-cash
basis as follows:
(i)
the historical Ex-Cash PER of 14.35 times of the Group as implied by the Ex-Cash
Offer Price being (aa) within the range of historical ex-cash PERs of the Comparable
Companies of between 3.45 times and 42.69 times; and (bb) at a premium of 17.0%
and 25.5% over the mean and median historical ex-cash PERs of the Comparable
Companies of 12.26 times and 11.43 times respectively; and
(ii)
the historical Ex-Cash Price-to-book NTA ratio of 4.08 times of the Group as
implied by the Ex-Cash Offer Price being (aa) above the range of historical ex-cash
price-to-book NTA ratios of the Comparable Companies of between 0.27 times
and 2.11 times; and (bb) at a significant premium of 202.2% and 202.2% over the
mean and median historical ex-cash price-to-book NTA ratios of the Comparable
Companies of 1.35 times and 1.35 times respectively;
a comparison with the Take-over Transactions as follows:
(i)
the premium of the Final Offer Price over the last transacted price of the Shares
prior to the Offer Announcement of 14.0% being (aa) within the range of the
corresponding premia of the Take-over Transactions of between 0.0% and 57.1%;
and (bb) below the corresponding mean and median premia of 30.3% and 28.9% of
the Take-over Transactions respectively;
(ii)
the premium of the Final Offer Price over the last transacted price of the Shares
prior to the Revised Offer Announcement of 0.6% being (aa) within the range of the
corresponding premia of the Take-over Transactions of between 0.0% and 57.1%;
and (bb) below the corresponding mean and median premia of 30.3% and 28.9% of
the Take-over Transactions respectively;
(iii)
the price-to-NTA ratio as implied by the Final Offer Price of 2.74 times being (aa)
within the range of corresponding price-to-NTA ratios of the Take-over Transactions
of between 0.54 times and 10.67 times; and (bb) at a significant premium of 115.7%
and 158.5% over the corresponding mean and median price-to-NTA ratios of the
Take-over Transactions of 1.27 times and 1.06 times respectively; and
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LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
(iv)
(f)
the price-to-RNTA ratio as implied by the Final Offer Price of 2.43 times being (aa)
within the range of corresponding price-to-NTA ratios of the Take-over Transactions
of between 0.54 times and 10.67 times; and (bb) at a significant premium of 91.3%
and 129.2% over the corresponding mean and median price-to-NTA ratios of the
Take-over Transactions of 1.27 times and 1.06 times respectively; and
other relevant considerations in relation to the Revised Offer as follows:
(i)
the historical financial performance and condition of the Group, as set out in
paragraph 4.5.1 of this letter;
(ii)
the limitation on subsequent offers by the Offeror, as set out in paragraph 4.5.2 of
this letter;
(iii)
the Revised Offer is already unconditional, as set out in paragraph 4.5.3 of this
letter;
(iv)
the comparison of the Final Offer Price to sale price in a recent share sale exercise,
as set out in paragraph 4.5.4 of this letter;
(v)
the comparison of the Final Offer Price with the Adjusted IPO Price and dividend
payouts, as set out in paragraph 4.5.5 of this letter;
(vi)
the intention of the Offeror in relation to the Final Offer Price, as set out in paragraph
4.5.6 of this letter;
(vii)
the compulsory acquisition and listing status of the Company, as set out in
paragraph 4.5.7 of this letter; and
(viii)
the absence of alternative take-over offers from third parties, as set out in paragraph
4.5.8 of this letter.
Based on our analysis set out above and after considering all relevant information available to
us as at the Latest Practicable Date, from a financial point of view, we are of the opinion that the
Final Offer Price is, on balance, fair and reasonable.
The Independent Directors may wish to consider advising Shareholders who:
(a)
wish to realise all or part of their investments in the Shares; and/or
(b)
are uncertain of the longer term performance and prospects of the Group,
to (i) accept the Revised Offer; or (ii) sell the Shares in the open market if they can obtain a
price higher than the Final Offer Price (after deducting related expenses). In this regard, we
note that the Shares had traded at and above the Final Offer Price for the period after the Offer
Announcement Date and up to the Latest Practicable Date.
The Independent Directors may also wish to consider advising Shareholders who:
(a)
are prepared to take a longer term view of their investment in the Shares; and/or
(b)
are positive about the prospects of the Group,
to retain all or part of their shareholdings in the Company.
- 34 -
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT
DIRECTORS IN RESPECT OF THE REVISED OFFER
The Independent Directors should note that we have arrived at our advice based on the
information made available to us as at the Latest Practicable Date. Our advice on the Revised
Offer cannot and does not take into account the future trading activity or patterns or price levels
that may be established for the Shares as these are governed by factors beyond the scope of
our review and do not fall within our terms of reference in connection with our evaluation of the
financial terms of the Revised Offer.
We have prepared this letter for the use of the Independent Directors in connection with and for
the purposes of their consideration of the Revised Offer, and any recommendation made by the
Independent Directors in respect of the Revised Offer shall remain their responsibility.
Whilst a copy of this Ietter may be reproduced in the Supplemental Letter, no other person may
reproduce, disseminate or quote this letter (or any part thereof) for any purpose (other than the
intended purpose in relation to the Revised Offer) at any time and in any manner without the prior
written consent of SAC Capital in each specific case.
This Ietter is governed by and shall be construed in accordance with the laws of Singapore, and is
strictly limited to the matters stated herein and does not apply by implication to any other matter.
Yours faithfully
For and on behalf of
SAC CAPITAL PRIVATE LIMITED
Bernard Lim Aik Kwang
Partner
Lau Sze Mei
Manager
- 35 -
Consciencefood processes food and
produces instant noodles and snack
noodles. The company markets its
noodles primarily in Indonesia.
Etika manufactures and distributes
sweetened condensed milk and
evaporated milk. The company also
repacks and distributes complementary
products such as full cream and instant
high calcium non-fat milk powder,
instant coffee powder, and tea dust.
Food Empire manufactures and markets
instant beverage products, frozen
convenience food, confectionery and
snack food. The company also exports
its products to markets such as Russia,
Eastern Europe, Central Asia, the
Middle East and Indochina.
Hosen distributes fast moving consumer
goods (FMCGs) under its house brand
as well as under third party leading
brands. The company has its own lines
of canned fruits, vegetables, seafood,
meat products and beverages.
Etika
Food Empire
Hosen
Business description
(as extracted from Bloomberg)
Consciencefood
Company
(Country of
Listing)
0.072
- 36 -
23.6
351.6
235.8
0.385
0.660
71.3
Market
capitalisation
S$’(million)
0.180
Share price
as at Latest
Practicable Date
(S$)
31 December
31 December
30 September
31 December
SGD71.2
USD237.7
RM984.8
RP775,193.0
SGD0.6
USD20.5
RM22.0
RP87,391.0
Latest full financial year
Net profit after
tax attributable
Financial
Revenue
to shareholders
year-end
(million)
(million)
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE
REVISED OFFER
Synear Food produces and markets
quick freeze food products. The
company also produces dumplings,
desserts and snacks.
Tsit Wing supplies coffee, tea
and related grocery items to food
establishments. The company also
undertakes the entire manufacturing
process from processing, roasting,
grinding to packaging of coffee, and
cleaning, blending to packaging of tea.
Tsit Wing also distributes in-house
brands of fast moving consumer goods
(FMCGs) and manage café outlets.
Synear Food
Tsit Wing
251.6
65.6
0.183
0.305
- 37 -
421.4
Market
capitalisation
S$’(million)
1.435
Source : Bloomberg L.P., annual reports and/or announcements of the respective companies
Sino Grandness processes food and
also cans fruits and vegetables including
asparagus, long beans, mushrooms,
bamboo shoots, sweet corn, chillies,
lychees, pineapples, and peaches.
Business description
(as extracted from Bloomberg)
Sino Grandness
Company
(Country of
Listing)
Share price
as at Latest
Practicable Date
(S$)
31 December
31 December
31 December
HKD601.7
RMB1,874.6
RMB1,640.3
HKD22.5
RMB68.0
RMB290.0
Latest full financial year
Net profit after
tax attributable
Financial
Revenue
to shareholders
year-end
(million)
(million)
LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE
REVISED OFFER
APPENDIX – ADDITIONAL GENERAL INFORMATION
1.
DIRECTORS
The names, addresses and descriptions of the Directors as at the Latest Practicable Date are set
out in paragraph 1 of Appendix 2 to the Offeree Circular.
2.
PRINCIPAL ACTIVITIES
The principal activities of the Company are set out in paragraph 3 of Appendix 2 to the Offeree
Circular.
3.
SHARE CAPITAL
3.1
Issued Share Capital. The Company has only one class of shares, being ordinary shares.
As at the Latest Practicable Date, the issued and paid-up share capital of the Company is
S$34,538,798.15. As at the Latest Practicable Date, the Company has 354,996,976 Shares and
6,120,000 treasury shares. The Shares are quoted and listed on the Mainboard of the SGX-ST.
3.2
Rights of Shareholders in respect of Capital, Dividends and Voting. The rights of
Shareholders in respect of capital, dividends and voting as contained in the Articles are set out in
Appendix 6 to the Offeree Circular.
3.3
Number of Shares Issued. The Company has not issued any Shares since the end of FY2012.
3.4
Outstanding Instruments Convertible into Shares. As at the Latest Practicable Date, there are
no outstanding Company Convertible Securities.
4.
FINANCIAL INFORMATION OF THE GROUP
A summary of the audited consolidated financial information of the Group for FY2010, FY2011,
FY2012 and the unaudited consolidated financial statements of the Group for the third quarter
ended 31 March 2013 (“3Q2013”) is set out in paragraph 8 of Appendix 2 to the Offeree Circular.
The summary of the financial information of the Group as set out in paragraph 8 of Appendix 2 to
the Offeree Circular is extracted from, and should be read together with, the audited consolidated
financial statements and the unaudited financial statements of the Group for the relevant
financial periods and the notes related thereto, copies of which are available on the website of
the SGX-ST at www.sgx.com and available for inspection at the Company’s registered office at
50 Raffles Place #32-01 Singapore Land Tower Singapore 048623. The audited consolidated
financial statements for FY2012 and the unaudited consolidated financial statements 3Q2013, are
respectively set out in Appendices 4 and 5 to the Offeree Circular.
Save as disclosed in the unaudited financial statements of the Group for 3Q2013, and any
other information on the Group which is publicly available (including without limitation, the
announcements released by the Group on the SGX-ST), there have been no material changes
to the financial position of the Company since 30 June 2012, being the date of the last audited
accounts of the Company laid before the Shareholders in general meeting.
Save as disclosed in this Supplemental Letter and the Offeree Circular, there has been no material
change in the information previously set out in paragraph 6 of Appendix 2 to the Offeree Circular.
5.
MATERIAL CONTRACTS
As at the Latest Practicable Date, neither the Company nor any of its subsidiaries have entered
into any material contracts with interested persons (other than those entered into in the ordinary
course of business) during the period commencing three (3) years before 5 July 2013, being the
Offer Announcement Date, and ending on the Latest Practicable Date.
- 38 -
APPENDIX – ADDITIONAL GENERAL INFORMATION
For completeness, as disclosed in the public announcements made by the Company via SGXNET
and the annual report of the Company for FY2010, FY2011 and FY2012, the Group had entered
into several interested person transactions in the ordinary course of its business during the period
commencing three (3) years before 5 July 2013, being the Offer Announcement Date, and ending
on the Latest Practicable Date.
6.
MATERIAL LITIGATION
As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in
any material litigation or arbitration proceedings, as plaintiff or defendant, which might materially
and adversely affect the financial position of the Company and its subsidiaries, taken as a
whole. As at the Latest Practicable Date, the Directors are not aware of any litigation, claim or
proceedings pending or threatened against the Company or any of its subsidiaries or of any fact
likely to give rise to any litigation, claims or proceedings which might materially and adversely
affect the financial position of the Company and its subsidiaries, taken as a whole.
7.
VALUATION ON SUBJECT PROPERTIES
The Company has commissioned independent valuations of the Subject Properties (the
“Valuation Reports”). Extracts of the Valuation Reports are set out in Appendix 8 to the Offeree
Circular. The basis of valuation of the Subject Properties is the open market value for the existing
use.
8.
OVERSEAS SHAREHOLDERS
This Supplemental Letter may not be sent to Overseas Shareholders due to potential restrictions
on sending such documents to the relevant overseas jurisdictions. Any affected Overseas
Shareholder may, nevertheless, obtain copies of this Supplemental Letter during normal business
hours up to the Revised Offer Closing Date, from the offices of the Registrar at 112 Robinson
Road #05-01 Singapore 068902, download a copy of the this Supplemental Letter from the
website of the SGX-ST at www.sgx.com, or make a request to the Registrar for this Supplemental
Letter to be sent to an address in Singapore by ordinary post at his own risk, up to five (5) Market
Days prior to the Revised Offer Closing Date.
9.
INFORMATION PERTAINING TO CPFIS INVESTORS
CPFIS Investors should refer to Section 16.5 of the Offer Document, the relevant portion of which
is reproduced below. Unless otherwise stated, all terms and expressions used in the extract below
shall have the meanings given to them in the Offer Document.
“16.5 GENERAL
CPFIS Investors will receive further information on how to accept the Offer from their
respective CPF Agent Banks directly. CPFIS Investors are advised to consult their
respective CPF Agent Banks should they require further information, and if they are in
any doubt as to the action they should take, CPFIS Investors should seek independent
professional advice. CPFIS Investors who wish to accept the Offer are to reply to their
respective CPF Agent Banks by the deadline stated in the letter from their respective CPF
Agent Banks. CPFIS Investors who accept the Offer will receive the Offer Price payable in
respect of their Offer Shares in their CPF investment accounts.”
- 39 -
APPENDIX – ADDITIONAL GENERAL INFORMATION
10.
11.
GENERAL INFORMATION
(a)
All expenses and costs incurred by the Company in relation to the Revised Offer will be
borne by the Company.
(b)
SAC Capital has given and has not withdrawn its written consent to the issue of this
Supplemental Letter, with the inclusion of its name and the IFA Letter on the Revised Offer
(as set out on pages 6 to 37 of this Supplemental Letter) and all references to them, in the
form and context in which they appear in this Supplemental Letter.
(c)
The Singapore Exchange Securities Trading Limited assumes no responsibility for the
correctness of any of the statements made, reports contained or opinions expressed in this
Supplemental Letter.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection at the registered office of the
Company at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623, during normal
business hours for the period during which the Revised Offer remains open for acceptance:
(a)
the Memorandum and the Articles of Association of the Company;
(b)
the annual reports of the Company for FY2010, FY2011 and FY2012;
(c)
the unaudited financial statements of the Group for 3Q2013;
(d)
the Offeree Circular;
(e)
the IFA Letter on the Revised Offer;
(f)
the full technical Valuation Reports on the Subject Properties; and
(g)
the letter of consent referred to in paragraph 10 of this Appendix.
- 40 -