OSIM International

[thor666]

https://www.fool.sg/2016/03/07/should-in...ional-ltd/

http://singaporestockmarketnews.com/2016...ugh-times/

2 links regarding GO. I'm inclined with fool.sg viewpoint.

(vested)

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I am also vested. But considering whether to accept or hold it out for a better offer 

Market has responded by trading -above- GO price.

Anyway if i use PE 15 of earnings (btw the 2 pe values that fool.sg quoted).. We should request mr ron to offer at... 2.06. [emoji1]

Of course, YMMV.

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[specuvestor]

This is very interesting. $11m non-core investment from "cash hoard" of $400m which includes proceeds from $170m CB issue last year...

Based on the capital management idea mooted by mgt, so far how much have they bought back their shares post CB issue?

Apple and Microsoft also use debt to buy back shares or issue dividends. "Capital management" (not capital allocation) are non operational lower quality shareholders' returns. However the difference is that nobody questions the cash they have.

If Osim didn't do the CB and proceed to share buybacks then at least we know the money in their coffers are "fungible" to SGD. Now we won't know.

Count me in as another doubter of the conundrum that is Osim

Anyone who has been following Osim long enough knows the conundrum of this company. It is not about the PnL because it is getting obvious it is unreliable.

I'm one of the doubter of Osim. This move reminds me of Satyam Computers but you can't argue with cold hard cash. Congrats to all who can get out with good profit.

PS he didn't use a new vehicle to do the privatisation so he needs about 96.9% (based on DBSV calculation) shares to privatise the company so that may tell us something

[Young Investor]

wow just months after getting fresh fund injection from the market and a big share price drop , and now boss delist at cheap price, how convenient!

the other reason would be to create some smoke so that share price will be stabilized and accounts not scrutinised as much as profit tumbles. All those unsold chairs which were supposed to fill those empty blocks of units in china must be starting to break down...


Well at least one less bad company on the SGX.

BlueKelah

You say "Well at least one less bad company on the SGX"

Mr Ron Sim is pending $ 310m to privatise Osim and You say "now boss delist at cheap price, how convenient!"

And you suggest that Osim is covering up by creating "some smoke so that share price will be stabilized and accounts not scrutinised as much as profit tumbles. All those unsold chairs which were supposed to fill those empty blocks of units in china must be starting to break down..."

How contradictory you can be!

[shadow_walker]

wow just months after getting fresh fund injection from the market and a big share price drop , and now boss delist at cheap price, how convenient!

the other reason would be to create some smoke so that share price will be stabilized and accounts not scrutinised as much as profit tumbles. All those unsold chairs which were supposed to fill those empty blocks of units in china must be starting to break down...


Well at least one less bad company on the SGX.

BlueKelah

You say "Well at least one less bad company on the SGX"

Mr Ron Sim is pending $ 310m to privatise Osim and You say "now boss delist at cheap price, how convenient!"

And you suggest that Osim is covering up by creating "some smoke so that share price will be stabilized and accounts not scrutinised as much as profit tumbles. All those unsold chairs which were supposed to fill those empty blocks of units in china must be starting to break down..."

How contradictory you can be!

Being bad does not mean you cannot delist it at a price cheaper than its fair valuation. Being bad can be in terms of quality of business, quality of earnings or integrity of management.

If we were to look at the corporate actions of Osim, one will be wary of being a minority investor.

During the GFC, Osim did a rights issue at an issue price of $0.055 to raise S$6.5 million when share price was at the trough. Was the company so desperate for cash at that point? If we were to exclude the non-cash impairment of Brookstone, Osim was generating S$15 million and S$23 million in net profit in 2008 and 2009 respectively. If we look at the balance sheet, there was no sign of financial distress. The company definitely has no need to raise the small amount of equity at such highly discounted price. The net impact was that Ron Sim raised its shareholding level by >5% by buying shares at sub 10 cents. Miraculously, the company returns to profitability in Apr 2009 after all the increase in stakes has taken place.
http://osim.listedcompany.com/newsroom/2...18F3.1.pdf
http://osim.listedcompany.com/newsroom/2...5C9E.1.pdf
http://osim.listedcompany.com/newsroom/2...73CF.1.pdf
http://osim.listedcompany.com/newsroom/2...F3A6.1.pdf
http://osim.listedcompany.com/newsroom.html/year/2009
http://www.straitstimes.com/business/com...yout-offer

In 2014, the company did a convertible bond issue and Ron Sim lent out his share for the hedge fund to short. Buyers of convertible bond are typically the hedge fund that short the stock simultaneously for convertible arbitrage. Is it fair to the minorities to lend out his share for others to short the stock? Was there once again a need for the convertible and the lending out of shares? Which major shareholder will encourage hedge fund to short his share?
http://infopub.sgx.com/FileOpen/_140827C...eID=312621

Yesterday, he announced the privatization offer of $1.32. The stock was above $1.32 ONLY 4 months ago on 6th Nov 2015. All the shareholders who stick by Ron Sim and bought their shares before 6th Nov 2015, will have suffered permanent capital loss if the GO went through. If the shares were trading at below valuation for prolonged period of time, it might be understandable to privatize them. However, 4 months is simply too short a period of time.

Even if a company is privatized or relisted, there is no guarantee to say they are totally clean. Sometimes, it can simply be smoke and mirror.China Animal Healthcare was delisted on SGX and relisted on HKEX. Some might have remembered the lengthy process that CAH took to get privatized. Today, it has been suspended on HKEX for close to a year. Another example will be Sound Global which was hit by a short-seller after delisted from SGX and relisted on HKEX.
http://www.hkexnews.hk/listedco/listcone...303853.PDF

My guess is Ron Sim will relist a leveraged Osim a few years later at a higher multiple. TWG will possibly be parked under his own investment account. For somebody who is always one step ahead of his minorities, I will be very wary of his company at any price. What is the point of value investing if the owner privatized on the cheap from temporary fluctuation in share price?

(not vested)

[Bluechipfan]

wow just months after getting fresh fund injection from the market and a big share price drop , and now boss delist at cheap price, how convenient!

the other reason would be to create some smoke so that share price will be stabilized and accounts not scrutinised as much as profit tumbles. All those unsold chairs which were supposed to fill those empty blocks of units in china must be starting to break down...


Well at least one less bad company on the SGX.

It seems Mr Kelah expect all listed companies in SGX are good companies. I also hope so but it can't be. If all listed companies are good, then investors don't need to do anything, just buy any shares and wait for profit. I wonder is there such a stock market existed in the world? Is Mr Kelah hoping SGX will do the job for investors? Just to be clear, I am not saying OSIM is a bad company. How can it be bad if you bought below $1 and sell above $2 while collecting dividend all this while?

[weijian]

If we were to look at the corporate actions of Osim, one will be wary of being a minority investor.
...
...
...
Yesterday, he announced the privatization offer of $1.32. The stock was above $1.32 ONLY 4 months ago on 6th Nov 2015. All the shareholders who stick by Ron Sim and bought their shares before 6th Nov 2015, will have suffered permanent capital loss if the GO went through. If the shares were trading at below valuation for prolonged period of time, it might be understandable to privatize them. However, 4 months is simply too short a period of time.

While I don't agree that there is a need to even consider 'shareholders who bought their shares before 6th Nov 2015 and stick by Ron Sim', simply because Ron Sim (and Mr Market) shouldn't and wouldn't care about that to make its decisions, but I thought I learnt something new from your sharing of Osim's corporate actions.

Generally, major shareholders 'slowly' take over minorities by doing (1) sharebuyback through the company coffers and then issuing them as performance shares to themselves, (2) direct sharebuyback through their own coffers, (3) implement scrip dividend. For this case, your hypothesis is the issuance of a heavily discounted rights issue (not mention weird figure of 2 right shares for every 9 existing shares) during a period of turmoil which is supposed to be a sweeping move to wipe out all the weak hands, who can't hold.

Interestingly to note, OSIM also decided to write off its Brookstone investment in the FY2008 statements. Although accounting rules generally states that you review your assets/goodwill on an annual basis, it is a great coincidence that it coincides closely with the announcement of the rights issue. In addition, FY08 was a bad year and so, it was really convenient to 'kitchen sink' everything. On hindsight, This rights issue was a brilliant move!

Ron Sim will be one for the OPMI to watch and learn. Kudos!

[CityFarmer]

A very rare error indeed for professional adviser, which costs millions...

(not vested)

Trading bungle forces Osim to raise offer price
13 Apr 2016 09:00
By Wong Wei Han

A costly trading bungle is forcing Osim International chief executive Ron Sim to pay as much as $4.7 million more in his bid to take the massage chair firm private.

On Tuesday last week, Mr Sim vowed that a revised offer of $1.37 a share to buy all Osim shares he did not already own was final. This did not include a two-cent dividend.

So Osim shareholders were surprised - and delighted - to be told on Friday night of a new final price of $1.39 a share, or $1.41 including the final dividend.

However, it was only yesterday afternoon that more details were revealed about the increased offer.

Mr Sim's hand had been forced by what market watchers say is a rare and unusual error on April 5.

The takeover entity Vision Three bought shares on the open market at prices above the $1.37 offer price then.

"Shares were inadvertently purchased on the SGX on April 5 between the prices of $1.38 and $1.39 for and on behalf of (Vision Three), even though the shares were trading on an ex-dividend basis," Credit Suisse, which is managing the deal, said in a Singapore Exchange announcement yesterday afternoon.

This means that Vision Three had given some sellers a higher price than the offer price and under Singapore's takeover laws, this is not permissible, unless the price is raised for everyone else as well.
...
Source: Straits Times

[thor666]

A very rare error indeed for professional adviser, which costs millions...

(not vested)

Trading bungle forces Osim to raise offer price
13 Apr 2016 09:00
By Wong Wei Han

A costly trading bungle is forcing Osim International chief executive Ron Sim to pay as much as $4.7 million more in his bid to take the massage chair firm private.

On Tuesday last week, Mr Sim vowed that a revised offer of $1.37 a share to buy all Osim shares he did not already own was final. This did not include a two-cent dividend.

So Osim shareholders were surprised - and delighted - to be told on Friday night of a new final price of $1.39 a share, or $1.41 including the final dividend.

However, it was only yesterday afternoon that more details were revealed about the increased offer.

Mr Sim's hand had been forced by what market watchers say is a rare and unusual error on April 5.

The takeover entity Vision Three bought shares on the open market at prices above the $1.37 offer price then.

"Shares were inadvertently purchased on the SGX on April 5 between the prices of $1.38 and $1.39 for and on behalf of (Vision Three), even though the shares were trading on an ex-dividend basis," Credit Suisse, which is managing the deal, said in a Singapore Exchange announcement yesterday afternoon.

This means that Vision Three had given some sellers a higher price than the offer price and under Singapore's takeover laws, this is not permissible, unless the price is raised for everyone else as well.
...
Source: Straits Times

The Qn to ask is.. Is this really an error?

I will leave it for vb judgement.

Vested.

[CityFarmer]

The Qn to ask is.. Is this really an error?

I will leave it for vb judgement.

Vested.

IMO, it is unlikely a deliberate move, instead of an error. Breaching Take-over code is serious, and might come with massive financial penalty. It is likely not only to compensate the differences. Furthermore, with the profile of the take-over, Mr. Sim might open a Pandora box on the matter.

SIAS calls on SIC to examine Ron Sim's unintentional purchases
...
Source: Business Times

[opmi]

Seems like SIAS only go for high profile cases. Kachang Puteh probably not interested.