Hafary founding family makes bid to take company private at S$0.64 a share
It cites low trading liquidity and mounting compliance costs as reasons to delist
[SINGAPORE] The founding family of Hafary Holdings is moving to take the building-materials supplier private, citing low trading liquidity and mounting compliance costs.
Hafary chief executive Low Kok Ann and his family have made a cash offer of S$0.64 per outstanding share, based on a Monday (Sep 28) bourse filing.
The bid, made through investment vehicle 23 Capital, represents a 4.9 per cent premium to the stock’s last closing price of S$0.61 on Friday, and a nearly 20 per cent premium over its 12-month volume-weighted average price.
Trading of Hafary shares was halted on Monday morning prior to market open, before the news.
The Low family, including non-executive director Low See Ching and Low Bee Lan, controls 39.14 per cent of the company. They have secured an irrevocable undertaking from majority shareholder Hap Seng Investment Holdings, which owns 50.82 per cent.
Combined, the bloc holds an 89.96 per cent stake – close to the 90 per cent threshold needed to take the company private.
UOB is acting as the sole financial adviser for the offer.
Hafary, which supplies premium tiles, stone and sanitary ware, said it has not tapped Singapore’s equity capital markets to raise funds in the past decade. Instead, it has relied on alternative funding sources such as bank borrowings to finance its operations.
Meanwhile, trading interest in the company has been largely anaemic. Over the 12 months preceding the offer, Hafary averaged a daily trading volume of just 32,359 shares, representing less than 0.016 per cent of its total share base.
The cash offer provides a clean exit without brokerage fees for retail investors trapped by the stock’s illiquidity, said the offeror.
The offer will remain open for acceptance for at least 28 days from the offer date of Sep 28.
Post-privatisation, the Low family expects to achieve greater management flexibility to navigate changing market conditions and optimise resources without the scrutiny and compliance costs of a public listing.
Hafary debuted on the SGX Catalist board in December 2009 before transferring to the mainboard in June 2013.
