Award-winning Financial Journalist

Ashish Saxena

Ron Sim’s bid to take Osim International Ltd private has been making headlines ever since it was announced on March 7.Yet, several pertinent aspects of the offer have still not been reported on.<ul><li>Mr Sim might revise the offer price higher as he hasn’t ruled out such a possibility in the offer announcement.</li><li>Convertible bondholders might have a strong case to skip Mr Sim’s loss-making offer to them.</li><li>It is not clear if Osim International’s financials would look as robust after delisting if the bondholders enforce their right to seek redemption.</li><li>There are contradictions about Mr Sim’s stake in various disclosures, including the offer announcement and the accompanying press release.</li><li>It seems Mr Sim’s family is likely to participate in the offer even though he has personally undertaken to not receive any consideration for his stake.</li><li>The timing of the query from SGX, request for a trading halt and the subsequent offer announcement arouses curiosity about what triggered what.</li></ul>But before we delve deeper into each of those insights, here is a quick review of the offer:Ron Sim Chye Hock, its controlling shareholder, Chairman and CEO, has made an offer to take Osim International private at S$1.32 per share.He is making the offer through an indirectly wholly-owned subsidiary Vision Three Pte Ltd (the offeror).Though the offer is voluntary and unconditional, Mr Sim has clearly mentioned the intention is to “delist and privatise the company”.Mr Sim already owns 69.25% stake as per the offer <a href="http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_Content&amp;B=AnnouncementLast12Months&amp;F=T8EEEGMQVY9KYUHB&amp;H=8e0a534e9b286907a9d1aaba2a71bdf260c6a889258a1aff9c7f9a29b0a33e37" target="_blank">announcement</a> on March 7.After adjusting for the dividend of S$0.02 per share that was announced in the recent FY15 earnings report, the net cash offer stands at S$1.30 per share.But is it the best that he can offer? Let’s find out.

Ron Sim’s bid to take Osim International Ltd private has been making headlines ever since it was announced on March 7.Yet, several pertinent aspects of the offer have still not been reported on.Mr Sim might revise the offer price higher as he hasn’t ruled out such a possibility in the offer announcement.Convertible bondholders might have a strong case to skip Mr Sim’s loss-making offer to them.It is not clear if Osim International’s financials would look as robust after delisting if the bondholders enforce their right to seek redemption.There are contradictions about Mr Sim’s stake in various disclosures, including the offer announcement and the accompanying press release.It seems Mr Sim’s family is likely to participate in the offer even though he has personally undertaken to not receive any consideration for his stake.The timing of the query from SGX, request for a trading halt and the subsequent offer announcement arouses curiosity about what triggered what.But before we delve deeper into each of those insights, here is a quick review of the offer:Ron Sim Chye Hock, its controlling shareholder, Chairman and CEO, has made an offer to take Osim International private at S$1.32 per share.He is making the offer through an indirectly wholly-owned subsidiary Vision Three Pte Ltd (the offeror).Though the offer is voluntary and unconditional, Mr Sim has clearly mentioned the intention is to “delist and privatise the company”.Mr Sim already owns 69.25% stake as per the offer announcement on March 7.After adjusting for the dividend of S$0.02 per share that was announced in the recent FY15 earnings report, the net cash offer stands at S$1.30 per share.But is it the best that he can offer? Let’s find out.

Are Convertible Bondholders Better off Skipping Mr Sim's Loss-Making Offer?