Monday, March 7, 2016


OSIM: Opportunistic privatisation offer by founder too cheap to succeed?

Lifestyle products manufacturer, OSIM has received an unconditional cash offer of $1.32/share from its founder, chairman and chief executive, Ron Sim.

At $1.32, OSIM is valued at 9.1x historical EV/EBITDA, 16.3x trailing P/E and 2.6x P/B, somewhat below regional specialty retailers which on average are priced at 14.8x EV/EBITDA, 33x trailing P/E, and 4.1x P/B.

Given that the stock has been sold down so much in the last 12 months, low relative valuations and fragmented shareholdings, it may be difficult for Sim to take the cash-rich company private.

As such, investors might hold out for a better offer, particularly those who had bought into the counter during its $2/share heydays between late 2013 and 2014.

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