Chosen: (S$0.198) Attractive exit offer at $0.24, a eight-year high
Private equity fund Shaw Kwei & Partners has made a voluntary conditional cash offer for the plastics component maker at $0.24/share (21% above last close), a price not seen since Jul '07. .
The offer price values Chosen at a market cap of $67.6m, a lofty 17.4x FY6/15 earnings and 1.0x P/B.
Majority shareholders representing 50.99% of the company have made irrevocable undertakings to accept the offer, which will turn it unconditional. Subsequently, if the offeror receives more than 90% acceptance level, it intends to take the company private and de-list from SGX.
The attractive acquisition valuation may revive attention to the dozens of plastic moulders and precision manufacturers listed on SGX, which typically trade between 4-8x P/E depending on the industry cycle.
They includes Fu Yu (6.8x P/E). Sunningdale Tech (5.5x P/E), Mencast Holdings (4.1x P/E), Interplex (5.6x P/E), Innotek (loss-making) and GSS Energy (loss-making).