Best World’s exit offer ‘fair and reasonable’, says independent financial adviser

THE exit offer by has been deemed “fair and reasonable” by an independent financial adviser, said an offer circular filed on Monday (Jun 24).

The adviser, Evolve Capital Advisory, has thus recommended through the board’s independent directors that shareholders vote in favour of the selective capital reduction.

Best World made an exit offer by way of a selective capital reduction in April in a move to delist the personal-care products company, raising the price to S$2.56 a share in cash in late May – up from S$2.50 previously. It also said it had no intention to revise the offer price.

The final exit offer price is a premium to the historical trading price of the shares in the six months up to the last undisturbed trading day, when the share price ranged from S$1.60 to S$1.83. It is also a premium to the adjusted net asset value per share of S$1.36.

According to Evolve Capital Advisory’s computations, the estimated value of each Best World share ranges between S$1.36 and S$2.69. Given that the final exit offer price is within the fourth quartile of this range, the offer is thus deemed “fair”.

The probability of receiving competing offers is low, Evolve Capital Advisory noted, so the exit offer thus gives an opportunity to eligible shareholders, who may find it difficult to exit their investment at a fair market price because of the counter’s low trading liquidity.

Subject to shareholders’ approval at an extraordinary general meeting and the High Court’s approval of the exit offer, some 150.1 million shares of eligible shareholders, excluding the major shareholders who are involved in the business, will be scrapped.

This will reduce Best World shares by about 34.9 per cent to 280.3 million.

Best World shares closed at S$2.49, S$0.02 or 0.8 per cent higher on Monday before the independent financial adviser’s opinion on the exit offer was made public.