F31 : F31 0% Group on Friday announced that JK Global Treasures intends to make a voluntary conditional cash offer for all the issued and paid-up ordinary shares of the group at 13.8 Singapore cents per share.

Shares of the property developer last closed on Thursday at 11.8 cents, with a market capitalisation of S$792 million. Fragrance had a net asset value per share of 19.32 cents as at end-December 2020, according to its annual report.

The offeror JK Global Treasures and parties acting in concert with it currently hold 5.76 billion shares in Fragrance, representing an 85.8 per cent stake in the company.

JK Global Treasures' sole shareholder and director Koh Wee Meng, who is the executive chairman and chief executive of Fragrance, currently owns 74.7 per cent of Fragrance shares, while his wife Lim Wan Looi, an executive director of Fragrance, owns a 10.9 per cent stake in the company. They have provided an irrevocable undertaking to tender all of their respective shares in acceptance of the offer.

The offer price of 13.8 cents per share exceeds Fragrance's last traded price on July 8 on the Singapore exchange (SGX) of 11.8 cents, representing a 16.9 per cent premium. It also represents a premium of 19 per cent, 19 per cent, 20 per cent and 21.1 per cent respectively over the one-month, three-month, six-month and 12-month volume-weighted average price per share.

DBS, acting as the financial adviser to JK Global Treasures, noted in a bourse filing that the offer was an "opportunity for shareholders to realise their investment at a premium without incurring brokerage fees".

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It also added that the offer "represents a unique cash exit opportunity for shareholders to liquidate and realise their entire investment at a premium to the prevailing market prices and free of brokerage costs, being an option which may not otherwise be readily available due to the low trading liquidity of Fragrance shares". The company had an average daily trading volume of 0.002 per cent for the one-month, three-month, six-month and 12-month periods.

The offeror, with an intention to privatise the company, expects Fragrance will not need access to the Singapore equity capital markets to finance its operations in the foreseeable future, hence it "does not believe it is necessary for the company to maintain a listing on the SGX".

As Mr Koh, who holds more than 50 per cent of Fragrance's shares, has undertaken to accept the offer, no other general offer will be capable of turning unconditional or succeeding, DBS said.

It added that JK Global Treasures "believes that privatising the company will provide the offeror with more flexibility to manage the business of the company and its subsidiaries, optimise the use of its management and resources and facilitate the implementation of any operational change."