General Announcement::Voluntary Conditional Cash Offer - Offer Announcement

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR BUY SECURITIES IN ANY JURISDICTION, INCLUDING IN THE UNITED STATES.

VOLUNTARY CONDITIONAL CASH OFFER

by

DBS Bank Ltd.

(Incorporated in the Republic of Singapore)

(Company Registration No. 196800306E)

for and on behalf of

JK Global Treasures Pte. Ltd.

(Incorporated in the Republic of Singapore)

(Company Registration No. 201734224G)

for

all the issued ordinary shares in the capital of

Fragrance Group Limited

(Incorporated in the Republic of Singapore)

(Company Registration No. 200006656M)

OFFER ANNOUNCEMENT

1. INTRODUCTION
   DBS Bank Ltd. ("DBS Bank") wishes to announce, for and on behalf of JK Global Treasures Pte. Ltd. (the "Offeror") that, in accordance with the Singapore Code on Take-overs and Mergers (the "Code"), the Offeror intends to make a voluntary conditional cash offer (the "Offer") for all the issued ordinary shares (the "Fragrance Shares") in the capital of Fragrance Group Limited ("Fragrance" or the "Company"), including all the Fragrance Shares owned, controlled or agreed to be acquired by parties acting or deemed to be acting in concert with the Offeror.
2. THE OFFER

2.1 Offer Terms. In accordance with Section 139 of the Securities and Futures Act, Chapter 289 of Singapore and the Code and subject to the terms and conditions to be set out in the formal offer document to be issued by DBS Bank on behalf of the Offeror (the "Offer Document"), the Offer will be made by the Offeror for all the Fragrance Shares on the following basis:

1. For each Fragrance Share: S$0.138 in cash (the "Offer Price").
2. The Fragrance Shares will be acquired (i) fully paid; (ii) free from all liens, equities, claims, charges, pledges, mortgages, encumbrances, options, powers of sale, declarations of trust, hypothecations, retentions of title, rights of pre-emption, rights of first refusal,

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moratorium or any other third party rights or security interests of any nature whatsoever or any agreements, arrangements or obligations to create any of the foregoing; and (iii) together with all rights, benefits and entitlements attached thereto as at date of this announcement (the "Announcement Date") and hereafter attaching thereto, including the right to receive and retain all dividends, rights and other distributions and/or return of capital (if any) ("Distributions") declared, paid or made by the Company in respect of the Fragrance Shares on or after the Announcement Date.

Accordingly, if any Distribution is declared, paid or made by Fragrance on or after the Announcement Date to a shareholder of Fragrance ("Shareholder") who accepts or has accepted the Offer and the settlement date in respect of the Fragrance Shares accepted pursuant to the Offer falls after the books closure date for the determination of entitlements to such Distribution, the Offeror reserves the right to reduce the Offer Price payable in respect of such Fragrance Share by the amount of such Distribution.

2.1.3 The Offer will be extended to any and all Fragrance Shares owned, controlled or agreed to be acquired by any party acting or deemed to be acting in concert with the Offeror in connection with the Offer.

2.2 Acceptance Condition. The Offer will be subject to the Offeror having received, by the close of the Offer, valid acceptances (which have not been withdrawn) in respect of such number of Fragrance Shares which, together with Fragrance Shares acquired or agreed to be acquired before or during the Offer, will result in the Offeror and parties acting in concert with the Offeror holding Fragrance Shares representing not less than 90 per cent. (the "Offer Threshold") of all the Fragrance Shares in issue as at the close of the Offer ("Acceptance Condition").

As at the Announcement Date, based on the information available to the Offeror, the Offeror and parties acting in concert with the Offeror hold in aggregate 5,757,000,000 Fragrance Shares representing 85.75 per cent. of all the issued Fragrance Shares.

The Offeror reserves the right to revise the Acceptance Condition, subject to the consent of the Securities Industry Council, by reducing the Offer Threshold to more than 50 per cent. of the total number of Fragrance Shares. In the event that the Acceptance Condition is revised, the revised Offer will remain open for another 14 days following such revision and Shareholders who have accepted the initial Offer will be allowed to withdraw their acceptance within eight days of the notification of such revision.

Save for the Acceptance Condition, the Offer is unconditional in all other respects.

3. INFORMATION ON FRAGRANCE

3.1 Fragrance. Fragrance is a public limited company incorporated in Singapore and listed on the

Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST"). The principal business of Fragrance is the development of residential, commercial, hotel and industrial properties. Other activities of the Group comprise the holding of investment and hotel properties and hotel operations. As at the Announcement Date, Fragrance:

1. has an issued and paid-up share capital of S$150,000,000 comprising 6,713,600,000 ordinary shares, with 6,400,000 treasury shares; and
2. has not granted any options or issued any rights, warrants or other securities convertible into, exercisable for or redeemable for any Fragrance Shares.

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3.2 Directors of Fragrance. The directors of Fragrance as at the Announcement Date are:

1. Dr. Koh Wee Meng ("KWM") (Executive Chairman and Chief Executive Officer);
2. Ms. Lim Wan Looi ("LWL") (Executive Director);
3. Mr. Periakaruppan Aravindan (Executive Director and Deputy Chief Executive Officer);
4. Mr. Leow Chung Chong Yam Soon (Lead Independent Director);
5. Mr. Lo Kim Seng (Independent Director); and
6. Mr. Tham Chee Soon (Independent Director).

4. INFORMATION ON THE OFFEROR

1. The Offeror is a company incorporated in Singapore on 28 November 2017. Its principal activity is investment holding.
2. As at the Announcement Date, the Offeror has an issued and paid-up share capital of S$1,000,000 comprising 1,000,000 ordinary shares, and KWM is the sole shareholder and director of the Offeror.

5. IRREVOCABLE UNDERTAKINGS

1. KWM Irrevocable Undertaking
2. 1. KWM Irrevocable Undertaking. KWM has provided an irrevocable undertaking (the "KWM Irrevocable Undertaking") to accept the Offer in respect of the Fragrance Shares held by him prior to and up to the close of the Offer. As at the Announcement Date, KWM holds in aggregate 5,015,500,000 Fragrance Shares (the "Deferred Consideration Shares"), representing approximately 74.71 per cent. of the issued Fragrance Shares. The KWM Irrevocable Undertaking will lapse if the Offer lapses or is withdrawn.
   2. Deferred Consideration. In addition, pursuant to the terms of the Irrevocable Undertaking, KWM will tender his Fragrance Shares unconditionally in acceptance of the Offer and also waive his right to receive the cash consideration within the stipulated timeline under the Code. KWM has agreed that payment for the Deferred Consideration Shares shall be deferred to a date falling three months after the close of the Offer or such other later date as may be agreed among KWM and the Offeror and such payment shall be made on the agreed date free of interest.
3. LWL Irrevocable Undertaking
4. 1. LWL Irrevocable Undertaking LWL, the spouse of KWM, has provided an irrevocable undertaking (the "LWL Irrevocable Undertaking" and together with the KWM Irrevocable Undertaking, the "Irrevocable Undertakings") to accept the Offer in respect of the Fragrance Shares held by her prior to and up to the close of the Offer, subject to (i) the directors of the Company who are independent for the purposes of the Offer (the "Independent Directors") recommending that Shareholders accept the Offer and (ii) the independent financial adviser to the Independent Directors opining that the Offer is reasonable and recommending that Shareholders accept the Offer.

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As at the Announcement Date, LWL holds in aggregate 735,000,000 Fragrance Shares (the "LWL Shares"), representing approximately 10.94 per cent. of the issued Fragrance Shares. The LWL Irrevocable Undertaking will lapse if the Offer lapses or is withdrawn.

5.2.2 Cash Consideration. Pursuant to the LWL Irrevocable Undertaking, subject to the conditions set out in 5.2.1, LWL will be tendering the Fragrance Shares held by her for cash, on the same terms as all other Fragrance Shares which will be tendered in acceptance of the Offer.

5.3 Further Details. Further details of the Irrevocable Undertakings are set out in Part 2 of the Schedule.

6. RATIONALE FOR THE OFFER

6.1 Opportunity for Shareholders to realise their investment at a premium without incurring brokerage fees. The Offer presents Shareholders with an opportunity to realise their investment in their Fragrance Shares at a premium of approximately 16.9 per cent. over the Company's closing price of S$0.118 as of 08 July 2021, being the last full trading day of the Company prior to the

Announcement Date (the "Last Trading Date") and a premium of 19.0 per cent., 19.0 per cent., 20.0 per cent., and 21.1 per cent. over the one-month volume weighted average price ("VWAP") of S$0.116, three-month VWAP of S$0.116, six-month VWAP of S$0.115 and 12-month VWAP of S$0.114, respectively, without incurring brokerage and other trading costs.

Notes:

1. The S$ figures (other than the Offer Price) are rounded to the nearest three (3) decimal places and computed on data sourced from Bloomberg L.P. up to and including the Last Trading Day.
2. The respective premia are rounded to the nearest one (1) decimal place.

6.2 Opportunity for Shareholders who may otherwise find it difficult to exit their investment in

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the Company due to low trading liquidity. The trading volume of the Fragrance Shares has been generally low, with an average daily trading volume1 of approximately 141,523 Fragrance Shares, 143,540 Fragrance Shares, 142,159 Fragrance Shares and 108,820 Fragrance Shares

The average daily trading volume is computed based on the total volume of Fragrance Shares traded divided by the number of Market Days2 with respect to the one-month period, three-month period, six-month period and 12-month period up to and including the Last Trading Date.

A day on which SGX-ST is open for the trading of securities.

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during the one-month period, three-month period, six-month period and 12-month period up to and including the Last Trading Date.

	One-	Three-	Six-	Twelve-
	month	months	months	months
Average Daily Trading Volume	141,523	143,540	142,159	108,820
Average daily trading volume as
a percentage (%) of total number	0.002%	0.002%	0.002%	0.002%
of issued Shares(1)(2)

Notes:

1. The average daily trading volume is based on data extracted from Bloomberg L.P. as at the Last Trading Day and calculated using the daily total volume of Shares traded divided by the total number of Shares.
2. The percentage figures are rounded to the nearest three decimal places.

Hence, the Offer represents a unique cash exit opportunity for Shareholders to liquidate and realise their entire investment at a premium to the prevailing market prices and free of brokerage costs, being an option which may not otherwise be readily available due to the low trading liquidity of the Fragrance Shares.

1. Unlikely to require access to equity capital markets. Since its initial public offering in 2005, the Company has not carried out any exercise to raise equity capital on the SGX-ST.The Offeror is of the view that the Company is unlikely to require access to Singapore equity capital markets to finance its operations in the foreseeable future. Accordingly, the Offeror does not believe it is necessary for the Company to maintain a listing on the SGX-ST.
2. Only Offer capable of turning unconditional or succeeding. Given that KWM, who holds more than 50 per cent. of the Shares, has undertaken to accept the Offer, no other general offer will be capable of turning unconditional or succeeding. Should the Offer fail to become or be declared unconditional, the Offeror is not permitted under the Code to make another general offer for the Company for 12 months following the lapse of the Offer.
3. Greater management flexibility. The Offeror is making the Offer with a view to delisting the Company from the SGX-ST and exercising its rights of compulsory acquisition. The Offeror believes that privatising the Company will provide the Offeror with more flexibility to manage the business of the Company and its subsidiaries (the "Group"), optimise the use of its management and resources and facilitate the implementation of any operational change.
4. Compliance costs of maintaining listing status. In maintaining its listed status, the Company incurs compliance and associated costs. In the event that the Company is delisted from the SGX- ST, the Company will be able to save on expenses relating to the maintenance of a listed status and focus its resources on its business operations.

7. THE OFFEROR'S INTENTIONS FOR THE COMPANY

The Offeror intends for the Company to continue with its existing activities and has no intention to

(i) introduce any major changes to the business of the Company; (ii) re-deploy the fixed assets of the Company; or (iii) discontinue the employment of any of the existing employees of the Group,

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