Dymon Asia-linked consortium launches bid to privatise SG hotel group Amara

Singapore-listed Amara Holdings on Tuesday received a voluntary cash offer from a consortium consisting of its founding family and Dymon Asia Private Equity’s investment vehicle in a deal aiming to delist one of the city-state’s oldest hotel groups. 

Albert Teo, the company’s CEO and grandson of the late founder, together with his siblings and family members, are looking to privatise the company with almost 70% ownership in the consortium alongside a special-purpose vehicle owned by Dymon Asia’s $650-million mid-market fund, which holds the remaining shares. 

The group of buyout offerors cited low trading liquidity and a challenging growth outlook, among other reasons, for the deal, according to a disclosure to the stock exchange.

The final offer price of S$0.60 per share for Amara represents a 53.8% premium over its share price of S$0.39 in June when the company notified the stock exchange that its controlling shareholders were in talks with a third party about a possible transaction involving Amara. Its shares were most recently traded at S$0.46 before a trading halt last Friday at a market capitalisation of S$265.39 million ($195 million). 

“The offer provides shareholders with an opportunity to liquidate and realise their investment in the shares at a premium over the historical traded prices of the shares, which may otherwise not be available given the low trading liquidity of the shares,” said the filing. The deal presents a ”clean cash exit opportunity” that incurs no brokerage and other trading costs.

The stock had an average trading volume of 31,473 shares over a 12-month period as of June 15, representing less than 0.02% of the company’s total issued shares at the time.

Amara, which owns, operates, and invests in hotels, properties, and food businesses in Asia, was founded as Teo Teck Huat Enterprises in 1970 before multiple name changes and listing on the secondary bourse Sesdaq in 1997 and subsequently SGX in 2000. Its footprint spans Singapore, Thailand and China.

Among its portfolio is the flagship hotel Amara Singapore on Tanjong Pagar Road, one of its “aged assets” that may need a makeover since its commencement in 1986. “Renewal of the aged assets of the group is a necessity for the group to maintain its edge in a highly competitive hospitality market. The requisite capital expenditure requirements from such a renewal amidst higher costs of capital could potentially limit profitability in the near term,” said that same filing.

Should the take-private deal go through, Amara will be joining a list of SGX-listed property companies that were delisted in recent months such as Chip Eng Seng and Lian Beng Group.