SINGAPORE — OSIM International shareholders who sold their shares on April 5 below the final offer price of S$1.39 a share will be compensated following the trading fiasco that forced company founder Ron Sim to raise his takeover price by 2 cents a share on April 8.

On April 5, Mr Sim, who is also chairman and CEO of the lifestyle products distributor, raised his offer (made through his takeover vehicle, Vision Three) to buy the remaining 31.7 per cent stake in the company he did not already own to S$1.39 a share, inclusive of a 2-cent final dividend for the fiscal year 2015, from S$1.32 previously.

But trading was abruptly halted minutes before the close of market, prompting widespread speculation over the reason for such a drastic move.

Despite having said his offer was final, Mr Sim on April 8 raised his offer by another 2 cents to S$1.41, including the 2-cent final dividend.

After the trading halt was lifted on April 11, it emerged that Vision Three had bought shares by mistake from the market between S$1.38 and S$1.39 on April 5, higher than the then ex-dividend S$1.37 offer price, according to a statement by Credit Suisse, which is managing the deal.

It was because of this that Vision Three was ordered by takeover regulator Securities Industry Council to raise the offer price to no less than S$1.39 a share, or S$1.41 including the final dividend, in line with the Code on Takeovers and Mergers.

Shareholders who sold on April 5 may not have had the opportunity to receive the equivalent of the final ex-dividend offer price of S$1.39 in respect to those shares, said Credit Suisse (Singapore) yesterday.

“In view of this, the offerer will make a payment (the additional payment) on a goodwill basis to all shareholders who sold their shares on the Singapore Exchange on April 5 at a transacted sale price below S$1.39,” said Credit Suisse (Singapore).

The additional payment will be made to all affected shareholders, regardless of whether they sold their shares to the offerer or to third parties.

Each affected shareholder will receive the difference between the transacted sale price for each share and the final ex-dividend offer price.

The payments will be made through the Central Depository and further details will be communicated to affected shareholders directly, it said.

Mr David Gerald, founder, president & CEO of Securities Investors Association (Singapore), said: “The decision to compensate is a responsible one and the fact that it was made speedily reflects the positive attitude on the part of Mr Ron Sim and his advisers.

“SIAS hopes that this experience will put all owners of listed companies who wish to take the privatisation route exercise extra care, to ensure that a similar situation does not occur again.”

Mr Mano Sabnani, who heads corporate advisory firm Rafflesia Holdings, and is a shareholder of OSIM, said: “It is good for the shareholders who sold that day (April 5) and they rightly deserve the compensation. As a long-term investor, my take on the valuation, however, remains the same, that it is too low given the future growth potential of the company.”

OSIM shares rose 0.5 cent yesterday to S$1.395 a share. The offer closes on April 29.