Novus Corporate Finance, the independent financial advisor (IFA) appointed to oversee the partial offer of a 10% stake in Cordlife Group by Medeze Group, is of the opinion that the financial terms of the partial offer are not fair and reasonable.
Medeze Group, a leader in Southeast Asia stem cell storage and services market, announced plans to acquire a 10% stake in Cordlife, or 25.63 million shares on May 13, for 25 cents per share.
The offeror said that the offer price represents a premium of 61.3% to Cordlife’s last-traded price of 15.5 cents on May 9. It also represents a premium of 61.3%, 60.3%, 59.2% and 61.3% to the volume weighted average price (VWAP) of the last one-, three-, six- and 12 month periods. The offer price is 42.9% above Cordlife’s 52-week high traded price of 17.5 cents as well.
Should the offer successfully take place, Medeze Group will own a 10.68% stake in Cordlife. Recognising the synergistic nature of both businesses, Medeze says will look at exploring business opportunities with Cordlife to “create long-term value and mutual benefit for both parties” upon the completion of the offer.
The IFA says that the offer price represents a discount to the volume weighted average price (VWAP) of shares for the period after the last trading day and up to the latest practicable date, and a discount to the closing price of the shares as at the latest practicable date.
It adds that the offer price represents a discount to the net asset value, net tangible asset, restated net asset value and restated net tangible asset per share as at Dec 31, 2024.
In addition, the net cash per share as at Dec 31 is slightly higher than the offer price.
Also, in respect of the comparable companies, the P/NAV ratio of Cordlife is below the mean and median P/NAV ratios of the comparable companies.
Accordingly, Novus Corporate Finance advises the recommending directors to recommend that shareholders reject the partial offer.
Shares in Cordlife closed flat at 28.5 cents on June 11.
