NOVO TELLUS has confirmed that its offer price for 27.9 per cent of Procurri Corporation' s shares at 36.5 Singapore cents apiece is final, except in the case of a competitive situation.

 

In a press statement on Wednesday, Novo Tellus noted that its partial offer is " fair and reasonable" and said that independent directors have recommended that shareholders vote in favour of and accept the partial offer.

 

This comes after Procurri' s substantial shareholder DeClout last week indicated in a letter to the former that it intends to vote against Novo Tellus' s partial offer. As at April 6, DeClout holds a 20.1 per cent interest in Procurri.

 

The offer to purchase the shares is made by OCBC on behalf of the offeror NTCP SPV VIII, an investment vehicle owned by Singapore-based private equity fund Novo Tellus PE Fund 2.

 

According to Novo Tellus, the partial offer is at an attractive 32.7 per cent premium to the closing price of Procurri shares on the last trading date on March 10, 2021.

 

The offer price also implies 2.05 times the net asset value per offer share of 17.9 cents, and is 39.8 times Procurri' s earnings per share in the last 12 months, based on the letter dated April 19 from the independent financial adviser Novus Corporate Finance to the independent directors.

 

Novo Tellus said in its statement that Procurri requires " significant strategic investment to grow long-term share value" . The private equity firm believes that Procurri " faces a very challenging transition" , with " limited revenue visibility" and " large investments needed to generate future growth" . This may likely result in depressed earnings prospects and the firm likely being unable to pay dividends in the next few years, Novo Tellus said.

 

Keith Toh, partner of Novo Tellus and director of the offeror, said: " We believe our partial offer gives shareholders a choice to realise an attractive cash premium for their shares in a difficult environment, and continuing to participate in long-term value at Procurri as the company will stay public."

 

According to Novo Tellus, shareholders have the choice to tender up to 100 per cent of their shares as at the record date for a 32.7 per cent premium over the closing price on the last trading date should the partial offer be successful. Shares that are not tendered will remain publicly tradeable.

 

For the partial offer to be successful, the offeror must receive more than 50 per cent of valid votes from independent shareholders in approval of the partial offer, and more than 27.9 per cent of the shares, or 82.1 million shares tendered in acceptance of the partial offer.

 

If the partial offer is successful, the offeror would own a 51 per cent stake in Procurri as a result of share transfers from another Novo Tellus wholly-owned subsidiary and co-investor ACT Holdings, which are part of the deal.

 

Votes and acceptances of the partial offer must be received by 5.30pm on May 3, 2021.

 

PROCURRI has received a letter dated April 13 from substantial shareholder DeClout indicating that the latter intends to vote against Novo Tellus' partial offer of 36.5 Singapore cents per share, the enterprise hardware supplier said in a bourse filing on Wednesday.

 

The offer is made by OCBC on behalf of the offeror NTCP SPV VIII, which is an investment vehicle owned by Singapore-based private equity fund Novo Tellus PE Fund 2. The partial offer was launched to acquire an additional 27.91 per cent of Procurri' s shares.

 

If the partial offer had been successful, the offeror would have owned a 51 per cent stake in Procurri. This is a result of share transfers from another Novo Tellus wholly-owned subsidiary and co-investor ACT Holdings, which are part of the deal.

 

According to Novo Tellus' press statement on March 15, the partial offer will allow the offeror and lead investor Novo Tellus to take a more active role in working with Procurri to create sustainable value in the coming years.

 

As at April 6, DeClout holds a 20.1 per cent interest in Procurri.

 

Procurri' s trading halt was lifted after the announcement. The mainboard-listed company had called for a trading halt on Wednesday morning.