OSIM CEO’s latest offer might be as good as it’s going to get: Maybank Kim Eng

Holding out for a better offer could be disastrous.

Investors should snap up OSIM CEO Ron Sim’s latest offer of $1.39 per share, according to a report by Maybank Kim Eng.

Sim’s final and raised offer remains on the low side compared to the forecasted $1.46. It is even lower is one considers that the final DPS of 2 cents is included in the $1.39 offer. However, this may be the best that minority shareholders can get as Sim has put his foot down on further increases.

Therefore, Maybank KE urges investors to snap up the new offer. Minority shareholders may regret passing up the offer as earnings can turn more volatile and dividends cut. Further, this could last six months, as takeover rules bar Sim from making another offer during this time.

The last hope now is for the emergence of an activist shareholder who can block Sim. The probability of this is low, though. The biggest fund holder is Capital Group with 2.9%, followed by Templeton and Fidelity with 1.6% to 1.7% each. None has been involved in publicly-disclosed activist squabbles before, save for Norges Investment Bank. However, Norges holds only 0.7%.

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