SINGAPORE: Courts Asia has received an acquisition offer by a subsidiary of Japanese electronics retailer, Nojima.
PricewaterhouseCoopers (PWC) Corporate Finance, who will be handling the prospective buyout, announced the offer on Friday (Jan 18).
The offer price of S$0.205 is 34.9 per cent higher than the closing price on Wednesday at S$0.152, and is subject to acceptances sufficient to give Nojima ownership to more than 50 per cent of the total shares.
Singapore Retail Group, which owns 73.8 per cent of the shares, has undertaken to tender all of its shares in Courts Asia in acceptance of the offer.
Nojima Asia Pacific, the offerer, was incorporated in Singapore last December for the purposes of making the offer, and is wholly owned by Nojima.
Listed under the Tokyo Stock Exchange, Nojima has a market capitalisation of S$1.4 billion, and registered S$6.1 billion in revenue during the financial year ending March 2018.
The retailer has more than 850 stores in Japan, selling mainly consumer digital appliances including audio-visual equipment and mobile phones.
The move comes as Nojima seeks to enter the consumer electronics market in Southeast Asia "where market growth is expected", said the announcement. It currently has two stores in Cambodia.
Nojima expects to gain a strong foothold in Southeast Asia by acquiring Courts Asia, believing that "there are potential synergies that can be created, including cross-selling to an enlarged customer base, economies of scale, improvement of productivity and cost efficiencies, as well as the sharing of knowledge such as know-how and best practices".
Courts Asia distributes and retails electrical, IT and furniture products to the Singapore, Indonesia and Malaysia markets, and has a share capital of S$267.3 million.
Should the acquisition proceed, Nojima may undertake "a strategic and operational review of the company" to realise these synergies.
It will also consider delisting the company from the Singapore Exchange "in order to facilitate management and operational control and leverage over the company".
The announcement highlighted that Courts Asia's share price has not closed higher than the offer price since Jul 27 last year, and that its trading volume has been low at 0.04 per cent of total shares in the past year.
"The offer represents a clean cash exit opportunity for shareholders to realise their investment without incurring brokerage and other trading costs, an option which may not otherwise be readily available due to the low trading liquidity of the shares," Nojima said.
The offer document will be dispatched to shareholders between 14 and 21 days from the date of the announcement.