Shares in Singapore Paincare opened at 16.9 cents on June 5, some 7.6% higher than the company’s last-closed share price of 15.7 cents.
The share price surge comes after the Securities Investors Association (Singapore) urged Singapore Paincare’s minority shareholders to wait until the independent financial adviser (IFA) has issued its report before selling their shares.
Instead of seeking slight gains by selling their shares in the open market, SIAS notes that shareholders who sold will not have recourse if the offer price is increased subsequently.
Further to its statement issued on June 4, SIAS notes that Singapore Paincare was listed at 22 cents per share in July 2020 during Covid-19 when valuations were “depressed”. At the time, the benchmark Straits Times Index (STI) was trading at around 2,500 points.
The company is seeking to go private at 16 cents per share when the STI is currently trading at around 3,900 points, SIAS notes. Singapore Paincare made the delisting announcement on May 28.
It adds that the offer price stands at a “slight discount” to Singapore Paincare’s audited net asset value (NAV) per share of 16.6 cents as at June 30, 2024, while the company’s unaudited NAV stood at 16.3 cents per share as at Dec 31, 2024.
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Should the same IPO premium be applied now, SIAS believes the privatisation price should be around 36 cents to 37 cents.
“SIAS also notes that well-managed healthcare companies generally trade at premiums to their NAV. It is also worth remembering that for a delisting to take place, the IFA has to conclude that the offer is both fair and reasonable,” says the release signed off by David Gerald, founder, president and CEO of SIAS.
SIAS further pointed out that the deal is conducted via a scheme of arrangement, meaning the approval has to be obtained by over 50% of shareholders at the scheme meeting and over 75% in value of the shares held by shareholders voting.
As at 10.04am, shares in Singapore Paincare are trading 0.5 cents higher or 3.19% up at 16.2 cents.
