Japan retailer Nojima’s offer to buy over Courts Asia sends the furniture seller’s shares leaping

A subsidiary of Japanese electronics retailer Nojima Corporation (Nojima) has made a conditional cash offer to sweep up all of the issued and outstanding ordinary shares of Courts Asia at an offer price of S$0.205 per share.

The news, which was announced in a regulatory filing on the Singapore Exchange in the wee hours of Friday morning, saw the stock soar to more than 31.6% to S$0.200 by 4.30pm, Singapore time. The counter had closed at S$0.152 on Thursday.

Courts Asia had requested for a trading halt during pre-market hours at 7.35am on Friday, and lifted the halt at 1.07pm.

The offer price of S$0.205 from Nojima’s subsidiary Nojima Asia Pacific (Nojima Asia) represents a 34.9% premium from the trading amount of S$0.152 on Wednesday, and around a 36.1%, 34.3%, and 23.3% premium above the volume weighted average price per share for the one-month, three-month, and six-month period, respectively.

In the statement, Nojima Asia said it had been contemplating on entering the consumer appliance retail market in Southeast Asia, where it sees the potential for market growth. With the acquisition of the Courts Asia, Nojima Asia said it ‘expects to gain a strong foothold in Southeast Asia’.

Nojima Asia has already received an undertaking from the Singapore Retail Group (SRG), under which SRG has agreed to tender all its 382 million shares, representing a 73.8% stake in the company. Once SRG accepts, the offer will be unconditional.

Upon the completion of the offer, Nojima Asia may undertake a ‘strategic and operational review of Courts, with a view to realising synergies, economies of scale, cost efficiencies and growth potential’.

Nojima Asia may also consider delisting Courts Asia from the Singapore Exchange if it gets enough acceptances to do so. Courts Asia is the holding company for its Indonesia, Singapore, and Malaysia firms. It has been listed on Singapore’s mainboard since October 2012.

Nojima was incorporated in Japan in April 1962 and has been listed on the Tokyo Stock Exchange since July 2013. Nojima which has a staff count of over 8,000 employees globally, is an electrical appliance retail chain giant dealing mainly with the sale of consumer digital appliances, the operation of carrier shops which sell mobile phones and provide ancillary services, and the provision of Internet and web services in Japan.

The Japanese retailer has a market capitalization value of S$1.4 billion, and its turnover stands at S$6.1 billion.