Massaging Profits

uSqueez for the U.S. prez

Although George Bush was one of America's most unpopular presidents in history, he was clearly a favourite with foreign leaders, who showered him with lavish presents during his last year in office. German Chancellor Angela Merkel, for instance, sent a £2,700 Mercedes mountain bike. Abdelaziz Bouteflika, president of Algeria, and French leader Nicolas Sarkozy sent richly decorated saddles, probably thinking of Mr Bush's Texan roots.

Sadly for Mr Bush, the goodies had to be handed over to the State Department. Rules forbid U.S. officials from keeping most gifts given by foreign representatives - Singapore officials declare their gifts, have them valued by a government estimator, and then are allowed to buy them at a discount. One item Bush was probably happy to hand over must be the $579 OSIM uSqueez calf-and-foot-massager contributed by a Singapore official.

OSIM is in the news again. Brookstone, the loss making unit of lifestyle group OSIM, is seeking Chapter 11 bankruptcy protection in the United States, and may be sold off within days. OSIM made a $77 million write-off of Brookstone in 2009. Then, in 2013, OSIM also made a $31 million "impairment and foreign translation loss." That's a good $100 million down the drain.

Brookstone was Nasdaq listed until it was taken private by OSIM in 2005 together with Temasek Holdings, in a US$456 million buyout. As late as Sept 2013, OSIM was boasting it had 258 Brookstone outlets. Months later in January 2014, Brookstone, with $140 million of debt, missed a payment. It had only US$1.1 million in cash on 28 Sep 2013, having burnt away the US$32 million in the kitty just a year ago.

Privately owned retailer Spencer Spirit is rumoured to offer US$120 million for the OSIM/Temasek's US$456 million acquisition in 2005. That's pittance compared with the US$4.2 billion dangled by Temasek to take over Olam International Ltd. (OLAM). “Temasek is already a large holder of Olam so they probably know the business better than everybody else,” said the Singapore-based head of equity investment strategy at Standard Chartered Plc. It may be easy to tickle George Bush's tootsies with the uSqueez calf-and-foot-massager, but squeezing blood out of stone in a bad buy is quite a different matter. You need fingers and toes crossed to pray that public money is not poured down the drain.