Nojima Corp, a Japanese electronics retailer bids to buy Courts Asia at 20.5 cents per share as it expands its operations in South East Asia. The company offered above Singapore's courts closing price of about 15.2 cents on Thursday at a price which represents a premium of about 35 percent.
The bidding for Courts' share halted before the opening of the market on Friday. Courts' stocks continued to fall since the trading halt was lifted during the 12:00 p.m. break. The company's shares closed at 20 cents on Friday. The average turnover is at 225,000 shares in over 15 trading days. The offer is conditional that the shares owned by Nojima and its partners result in more than 50 percent of the shares in issue upon closing the deal. Recently, Nojima received an undertaking from Singapore Retail Group (SRG to tender all its 382 million shares or about 73.8 percent stake in the company.
The Japanese company a retail chain that sells consumer digital appliances with estimated employees of not less than 8,000 employees worldwide. It has an estimated market share of $1.4 billion and it earned revenues of about $6.1 billion for the financial year that ended in March 2018.
If the deal is on, Nojima needs to conduct a strategic and operational review of Courts with focus on realizing connections, economies of scale, cost efficiencies and growth potential. Nojima also needs to delist Courts from the Singapore Stock Exchange upon getting enough approval to do so.
Nojima's main goal in the purchase is to expand its consumer appliance market in South-east Asia and to develop the partnership between the two retail groups. The company also aims to sell their products on a wider market, to widen the scale of the business, improve the productivity and the cost efficiency of their operations, and to share business inputs with Courts.
Courts had suffered an estimated loss of about $3.1 million during the second fiscal quarter from gaining during the same period of last year by $1.5 million. The company's revenues dropped by 6.4 percent to$165.1 million for three months which ended on Sept 30, 2018, due to its failing Singapore operations, it contributed lower revenue due to lower earned service charge income and corporate sales drop.
Courts announced on Tuesday that they will close their megastore in Tangerang, Indonesia due to successive profit loss to avoid high rental costs for the remaining lease term.
