Hwa Hong, Wing Tai, Teo family consortium launches bid to take Amara private at S$0.895 a share

[SINGAPORE] Amara on Monday (Apr 28) received a voluntary conditional general offer at S$0.895 per share from a consortium led by property company Hwa Hong, which was formerly listed on the Singapore Exchange.

The offer is final and values the hotel group at about S$514.6 million. It represents a premium of 27 per cent over Amara’s share price of S$0.705 on Apr 23, when the company called for a trading break.

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, respectively.

The offeror has obtained irrevocable undertakings from a group of Amara shareholders, with a combined stake of 90.58 per cent, to vote in favour of the deal. The group includes Amethyst Assets, which, in 2023, proposed to privatise Amara.

If the group accepts the proposal, the acceptance condition will be satisfied and the S$0.895-apiece offer will become unconditional.

The offeror, a special-purpose vehicle called DRC Investments, intends to privatise Amara, it said, citing low trading liquidity and challenging macroeconomic conditions.

DRC Investments includes a 35 per cent stake held by a fund sponsored by Hwa Hong and financial consultant Newfields. It is also 30 per cent owned by Albertsons Capital, whose shareholders are Albert Teo, the hotel group’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 S$0.895 offer represents a 33 per cent premium over Amara’s net asset value per share as at end-December 2024.

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.

As at Apr 28, the company has an issued and paid-up share capital of S$125.6 million, comprising 575 million shares, excluding those held in treasury.

“The offer represents a unique cash exit opportunity for shareholders to liquidate and realise their entire investment at a premium, an option which may not otherwise be readily available due to the low trading liquidity of the shares,” it said.

DRC Investments further cited the challenging macro and operating environment that Amara faces.

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, adding that prolonged uncertainty could also lead to consumers tightening their purse strings.

It also noted challenges arising from shifting consumer behaviour and retail disruptions, particularly for its malls in Singapore and China.

The offeror said: “The group may encounter challenges in optimising its tenant mix, sustaining profitability, and ensuring that its malls remain attractive to shoppers amid shifting market dynamics.”

Ong Eng Yaw, director of the offeror and group managing director of Hwa Hong, said the consortium aims to future-proof Amara’s assets to ensure that they are “well-positioned” to cater to evolving consumer behaviour and expectations.

Amara and its subsidiaries’ business segments comprise hotel investment and management, property investment and development, and specialty restaurants and food services. The group has operations in Singapore, Thailand and China.

Its hotel portfolio comprises its flagship Amara Singapore in Tanjong Pagar, Amara Sanctuary Resort Sentosa, Amara Signature Shanghai and Amara Bangkok. It also owns offices and malls in Singapore and China.

Other reasons for the privatisation offer include Amara’s listing status bringing fewer benefits to the company and shareholders, as well as saving on listing expenses.

Previous offer

The latest offer is the second time Amara has been the target of a privatisation deal.

In 2023, the hotel group received a voluntary cash offer at S$0.60 a share from Amethyst Assets – a consortium linked to Albert Teo, other members of his family and private equity investor Dymon Asia.

Amethyst cited a challenging growth environment and low trading liquidity as reasons for the deal. It also said high interest rates raised borrowing costs, which affected Amara’s profitability.

But the S$0.60-per-share offer failed to reach the compulsory acquisition threshold of 90 per cent; the offeror had cobbled together 88.39 per cent in shareholding interest.

As a result, Amethyst was not able to buy over the shares of shareholders who did not accept the offer.