Chinese medicine retailer Eu Yan Sang gets buyout offer from Temasek-backed group

Temasek brand logo (from its social media page)

By Joyce Koh

May 16, 2016

Eu Yan Sang International Ltd. has received a takeover bid from a group that includes a unit of Singapore state investment company Temasek Holdings Pte, valuing the retailer of traditional Chinese medicines such as bird’s nest soup and ginseng capsules at about S$269 million ($196 million).

The S$0.60 per share offer, which is final and excludes the interim dividend, is from a consortium comprising Temasek’s indirect wholly owned unit Blanca, Tower Capital TCM Holdings LP and some members of the founding Eu family, Singapore-based Eu Yan Sang said in a statement early Monday.

Eu Yan Sang fell 4.7 percent to S$0.615 by the close in Singapore after resuming trading. The shares had been halted since May 10, after they surged 10.3 percent to S$0.645 and prompted a query by the exchange. An external spokesman for Eu Yan Sang declined to comment on the trading in the company’s shares.

About 63.2 percent of shareholders have committed to accept the offer, including members of the Eu family, Aberdeen Asset Management Asia Ltd. and First State Investment Management (UK) Ltd., Eu Yan Sang said.

The consortium’s offer is attractive “considering the company’s recent financial performance and the current challenging environment it is operating in,” said Danny Koh, Tower Capital founder, in the statement. The acquisition “will allow the new investors to partner with the participating Eu Family shareholders in their efforts to reinvigorate the company’s businesses.”

Profit Plunged

Eu Yan Sang, whose founder opened the first shop in Malaysia in 1879 and has since expanded to more than 250 outlets in China, Hong Kong, Macau and Australia, reported Sunday third quarter net income slumped to S$286,000 from S$5.45 million a year earlier. It also proposed an interim dividend of 2.5 Singapore cents per share.

Credit Suisse Group AG is acting as financial adviser to the offerers, and UOB Venture Management Pte is one of the investors in Tower Capital, according to Eu Yan Sang’s statement. Eu Yan Sang’s takeover offer follows a proposal in April by Osim International Ltd. founder and Chief Executive Officer Ron Sim to take his company private.

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Bloomberg

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