Following news reports last week that global PE firm KKR is interested to acquire Goodpack, the former has now made an offer of S$2.50/share to the latter’s shareholders, valuing the company at about S$1.4b. This represents a 23.2% premium to Goodpack’s closing price on 18 Mar 2014, a day before the announcement by Goodpack of a possible transaction. This also represents a 6.8% premium to Friday’s closing price of S$2.34.

IBC Capital, a company held by a fund affiliated with KKR, has received irrevocable undertakings from Goodpack's executive chairman David Lam who owns a 32% stake in Goodpack. We have a BUY rating on the counter with a fair value estimate of S$2.61, which is just 4.4% higher than KKR’s offer price. As such, we recommend shareholders to accept the offer.

Source: OCBC Research - 28 May 2014