Neo Group

Neo Group founder seeks to take firm private via voluntary conditional cash offer

https://www.businesstimes.com.sg/compani...cash-offer

NEO Group founder, chairman and chief executive officer Neo Kah Kiat intends to take the Catalist-listed food caterer private via a voluntary conditional cash offer at S$0.60 per share, the firm announced on Tuesday after market close.

The offeror, Forestt Investment, was incorporated for the purpose of the offer, with its directors being Mr Neo and Neo Group executive director Liew Oi Peng.

Mr Neo and Ms Liew, who hold 76.79 per cent and 5.47 per cent of shares in Neo Group respectively - for a total of 82.26 per cent - have given their irrevocable undertakings for the offer.

The offer is an opportunity for shareholders to realise their investment "at a premium to historical prices without incurring brokerage and trading costs in an uncertain economic environment", said the offeror.

The offer price of S$0.60 per share is the highest closing price of the shares in over 2.5 years before March 29, the last trading day.

It represents a premium of 17.9 per cent, 14.5 per cent, 15.4 per cent, and 31 per cent, respectively, over the volume-weighted average price per share for the one-month, three-month, six-month, and 12-month periods up to and including the last trading day.

The offeror said it believes that delisting and privatising Neo Group will allow "greater control and management flexibility" to manage the business, respond to changing market conditions, and optimise the use of management and resources.

The offer document will be despatched to shareholders between 14 and 21 days from Tuesday's announcement, with the offer remaining open for acceptances by shareholders for at least 28 days from the offer document's date of posting.

The board will appoint an independent financial adviser (IFA) to advise the independent directors. A circular with the advice of the IFA and recommendations of the independent directors will be sent to shareholders within 14 days from the offer document's date of despatch.

In the meantime, shareholders are advised to exercise caution in dealing with their shares, said Neo Group.

(30-03-2021, 09:22 PM)new-comer1 Wrote: Neo Group founder seeks to take firm private via voluntary conditional cash offer

https://www.businesstimes.com.sg/compani...cash-offer

NEO Group founder, chairman and chief executive officer Neo Kah Kiat intends to take the Catalist-listed food caterer private via a voluntary conditional cash offer at S$0.60 per share, the firm announced on Tuesday after market close.

The offeror, Forestt Investment, was incorporated for the purpose of the offer, with its directors being Mr Neo and Neo Group executive director Liew Oi Peng.

Mr Neo and Ms Liew, who hold 76.79 per cent and 5.47 per cent of shares in Neo Group respectively - for a total of 82.26 per cent - have given their irrevocable undertakings for the offer.

The offer is an opportunity for shareholders to realise their investment "at a premium to historical prices without incurring brokerage and trading costs in an uncertain economic environment", said the offeror.

The offer price of S$0.60 per share is the highest closing price of the shares in over 2.5 years before March 29, the last trading day.

It represents a premium of 17.9 per cent, 14.5 per cent, 15.4 per cent, and 31 per cent, respectively, over the volume-weighted average price per share for the one-month, three-month, six-month, and 12-month periods up to and including the last trading day.

The offeror said it believes that delisting and privatising Neo Group will allow "greater control and management flexibility" to manage the business, respond to changing market conditions, and optimise the use of management and resources.

The offer document will be despatched to shareholders between 14 and 21 days from Tuesday's announcement, with the offer remaining open for acceptances by shareholders for at least 28 days from the offer document's date of posting.

The board will appoint an independent financial adviser (IFA) to advise the independent directors. A circular with the advice of the IFA and recommendations of the independent directors will be sent to shareholders within 14 days from the offer document's date of despatch.

In the meantime, shareholders are advised to exercise caution in dealing with their shares, said Neo Group.

I consider the offer price of $0.60 is too low as Mr Neo/ Ms Liew has bought 375,000 shares in the open market at around $0.99 on 12 Sep 2014.
https://links.sgx.com/1.0.0/corporate-an...9c14f87388

I thought the price is actually quite bullish, considering the recent years of poor performance, and the still-nascent recovery. If you bought in recent years at 40+ cents, the returns are quite okay.

Mr Neo is probably betting that the catering industry will still continue to grow in the years to come, and that his business will be a beneficiary.

(31-03-2021, 07:21 PM)karlmarx Wrote: I thought the price is actually quite bullish, considering the recent years of poor performance, and the still-nascent recovery. If you bought in recent years at 40+ cents, the returns are quite okay.

Mr Neo is probably betting that the catering industry will still continue to grow in the years to come, and that his business will be a beneficiary.

A closer look at Neo Group latest half year result shows a very bright future as the increase in profit is much higher than the government grants received which was $8.586 million.

Economics of scale will fully kick in when Neo Group moves to the new headquarter probably this or next year. Hidden value lies in the properties that Neo Group has if Mr Neo decides that some of these are no longer required after the move to the new headquarter which is much larger than the current premises.

Neo Group IPO 11 July 2012 at 30cts by CIMB

Offer at 60cts is double return in 9 years. I think he is at least fair to OPMI. VB has seen many that try to privatise on the cheap especially say 1/2 price of IPO or placement price ie market is their ATM.

And then relist again, here or elsewhere.

Nobody, including you or me, is going to privatise at fair value; but to treat OPMI fairly is different thing

I wonder whether the Select Group privatization saga will repeat itself for Neo Group?
For Select Group, the independent directors went against the recommendation of the Independent Financial Advisor and recommended that minority shareholders do not accept the offer.
https://www.valuebuddies.com/thread-7381-page-3.html

Mr Neo already secured >90% without much effort. Relatively easy for him to proceed with compulsory acquisition and delisting.

https://links.sgx.com/1.0.0/corporate-an...b872cb78db