Koufu receives management-led buyout offer to take company private

Koufu location at Anchorpoint Mall in Singapore; taken October 2018.Koufu location at Anchorpoint Mall in Singapore; taken October 2018.

Food court operator Koufu has received a management-led buyout offer of S$0.77 a share to take the company private, according to a filing to SGX from the offeror.

The offer price is a 15.8 percent premium over the last traded price of Koufu’s shares on 28 December, and a 14.4 percent premium over the one-month volume-weighted average price (VWAP), the filing said.

Dominus Capital, the offeror, was incorporated by Pang Lim, Koufu’s chairman and CEO, and Ng Hoon Tien, Koufu’s executive director, on a 50:50 basis for the purpose of making the offer, the filing said; Pang and Lim are a married couple.

While Dominus Capital doesn’t currently hold any shares, Pang and Ng have a deemed interest in 428.05 million shares, representing around 77.41 percent of Koufu, held via Jun Yuan Holdings, which is wholly owned by Pang and Ng, the filing said.

The offer is conditional upon Dominus Capital receiving acceptances of more than 90 percent of the issued shares, excluding treasury shares held by Koufu, the filing said.

Once an acquirer holds more than 90 percent of a company’s shares, it can compulsorily acquire the remainder as listed companies are required to maintain a minimum 10 percent free-float.

Dominus Capital plans to exercise the right to compulsorily acquire all of Koufu’s shares if acceptances of the offer reach more than 90 percent, and then to delist the company, the filing said.

Jun Yuan Holdings has provided an undertaking to tender its 77.41 percent stake to the offeror, and to waive its right to receive cash and instead will accept an interest-free promissory note, the filing said.

The offeror noted that Koufu’s shares generally have low trading volume, and the offer will provide shareholders a “clean cash exit opportunity” at a premium.

Dominus Capital also said delisting the Singapore-style coffee shop operator would give management greater control and flexibility for implementing strategic initiatives, and to avoid the compliance costs related to the listing status.

“The ongoing Covid-19 pandemic has had unprecedented impact on the global economy, and on the offeree group’s business operations and financial performance. Over the course of the last more than twenty months, the offeree group’s operations have had to navigate, inter alia, closures, differentiated levels of dining-in prohibitions and restrictions, caps in the number of persons at social gatherings as well as reduction in capacity at malls,” the filing said.

“Whilst the gradual relaxation of these restrictions may help the offeree group’s business operations improve progressively, the offeror recognises that the offeree group needs to stay vigilant and adaptable,” it added.

In a separate filing to SGX, Koufu said an independent financial advisor will be appointed to advise the company’s directors.

Koufu operates or manages 53 food courts, including three in Macau, 19 coffee shops and a commercial mall under the outlet and mall management segment, while the food and beverage retail segment has 82 food and beverage stalls, including five in Macau; 43 food and beverage kiosks, including two in Macau and one in Malaysia; 215 authorised/licenced food and beverage outlets, including 150 in the Philippines and eight in Indonesia; eight quick-serve restaurants (QSR), and four full service restaurants.