Northstar considers bid for Singapore-listed Spindex

The Southeast Asia-focused private equity firm – which primarily invests in Indonesia – said in a filing that it is considering all options with respect to Spindex, including a conditional offer for all outstanding shares at a higher price than the bid of S$0.85 per share submitted by Hong Wei Holdings. Hong Wei is controlled by Choo Pie Tan, who holds a 28.93% interest in Spindex and serves as its chairman.

The Tan-led consortium offered to buy Spindex on February 9 through a scheme of arrangement. An unnamed third party then made an unsolicited approach to the independent directors, requesting to conduct due diligence. The Tan consortium responded by agreeing to buy a further 14.69% of Spindex – taking its overall interest to 44.68% - and switching its bid to a more hostile mandatory conditional cash offer. A filing on March 6 said the offer had become unconditional because the consortium had accumulated a more than 50% interest.

As of midday trading on March 6, Spindex shares were trading at S$0.90, up 5.88%. It has gained more than 28% since the scheme of arrangement was announced. The February 8 closing price was S$0.70, well short of the previous peak of S$0.88 reached in August 2016.

Founded in 1981, Spindex produces precision components used in the imaging and printing industry (in printers, copiers and scanners), automotive and machinery customers (in brakes, drive systems and industrial tools), and consumer and lifestyle products (ranging from bicycles and fishing rods to washers and irons). Machinery and automotive systems account for nearly have of revenue.

The company generated S$124.2 million in revenue in 2016, up from S$114.2 million the previous year, while net profit slipped to S$10.1 million from S$12.2 million over the same period.

Northstar is currently investing its fourth fund, which closed in November 2015 at $810 million. Last year, the private equity firm offered to buy Innovalues, another Singapore-listed components manufacturer, in a deal worth approximately S$331.4 million. The Innovalues chairman supported the bid, which was structured as a scheme of arrangement. The company is expected to delist this month.

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• Topics
• Southeast Asia
• Industrials
• Buyouts
• Northstar Group
• Singapore
• manufacturing