Amara loses free float, trading to be suspended 

[SINGAPORE] The mandatory cash offer for hotel group Amara by a consortium led by property company Hwa Hong has turned unconditional.

As at 6 pm on Thursday (May 15), the total number of shares owned, controlled or agreed to be acquired by the offeror together with valid acceptances of the offer amounted to 522,529,331 shares, or 90.88 per cent of the total number of shares of Amara.

This means that Amara has lost its free float, as less than 10 per cent of the company’s shares are now held by the public. The Singapore Exchange will suspend trading of Amara’s shares at the close of the offer on Jun 10. 

The offeror, a special-purpose vehicle called DRC Investments, is able to privatise Amara at the offer price of S$0.895 per share which values the hotel group at about S$514.6 million. 

A fund sponsored by Hwa Hong and Malaysia-based Newfields holds a 35 per cent stake in DRC Investments. DRC Investments is also 30 per cent owned by Albertsons Capital, whose shareholders are Albert Teo, Amara’s chairman and chief executive, and his daughter Dawn Teo, Amara’s chief operating officer.

Wing Tai’s wholly owned subsidiary, Winteam Investment, also holds a 35 per cent stake in the consortium.

The offer represents a premium of 27 per cent over Amara’s closing price of S$0.705 on Apr 23 before the company called for a trading halt the following day.

The S$0.895 offer price also represents a 42.1 per cent, 44.8 per cent, 46.7 per cent and 48.9 per cent premium over Amara’s volume-weighted average price for the one-month, three-month, six-month and 12-month periods up to and including the last traded day, respectively.

The offeror intends to make Amara a wholly owned subsidiary, it said on Thursday. 

The low trading liquidity of Amara’s shares was cited as one reason for the offer. The stock had an average trading volume of 21,201 shares over the 12-month period leading up to Apr 23. This represented 0.004 per cent of the company’s total issued shares.

DRC Investments said in April that Amara was facing a challenging macro and operating environment.

The rise in protectionist policies and shifting trade agreements could disrupt supply chains and increase costs for businesses.

“These challenges may result in higher procurement expenses for the group’s operations, squeezing profit margins and impacting long-term growth prospects,” it said.

Shares of Amara closed flat at S$0.89 on Thursday before the announcement.