Blue Sphere Singapore, which already controls 92.7% of the company, plans to bid for the remaining 7.3% stake at Rp2,200 ($0.24) per share, pending approval from Darya VariaÆs shareholders at a meeting set to be held on November 21, 2006 in Jakarta. If shareholders agree to the privatisation proposal, Blue Sphere will make a tender offer and delist the company from the Jakarta Stock Exchange.
The offer price is more than a 40% premium to the highest traded price of the shares. In addition, it also represents a substantial 77% premium to the fair valuation of the shares prepared by the independent appraiser of Rp1,244 per share.
Blue Sphere is a member of Unilab Group which has been a private, family-owned pharmaceutical business for more than 60 years. Based in the Philippines, the group has never sold any shares in any of its group companies on a stock exchange. The privatisation proposal is therefore consistent with Unilab Group strategy as a private family-owned business in the region.
From the perspective of investors and the Jakarta Stock Exchange, there has been limited market interest and trading volumes, so the companyÆs listed status is adding little value for the shareholders or to the capital markets in Indonesia. With no expectation of accessing the capital markets in the foreseeable future, there is no strong rationale for the company to remain listed.
ING, the adviser on the deal, has a history of aiding in privatisation efforts in Indonesia. Last year it helped Komatsu, the world's second-biggest maker of construction equipment, buy the outstanding shares of its unit PT Komatsu Indonesia and delist that company. It also assisted in two earlier successful privatisations in Indonesia, one for Procter & Gamble in 2004 and one for Pfizer in 2002. The latter marked the first voluntary delisting in the history of Indonesia's capital markets.