UEM Land Holdings Bhd plans to take over rival Sunrise Bhd in a deal valued at some RM1.4 billion to expand and develop the expertise to build and market luxury properties.
Sources said the all-share offer values Sunrise at RM2.80 a share. This is 11 per cent higher than its last closing price of RM2.52 on Tuesday.
Three major shareholders, including Datuk Tong Kooi Ong, who hold more than 40 per cent of Sunrise, have agreed to the deal, which is structured as a voluntary general offer.
"UEM Land needs the expertise in luxury development. They don't have the marketing capabilities," said one of the sources.
Sunrise, valued at RM1.25 billion currently, is well known for its high-end development at Mont'Kiara. Although its market value is half that of UEM Land, its net profit is bigger at RM134 million in the financial year to June 30 2010.
UEM Land is valued at RM2.45 billion and its net profit in the financial year to December 31 2009 was RM115 million.
Shares of both UEM Land and Sunrise have been suspended from yesterday until 5pm today. UEM Land is due to hold a press conference today to announce a mega corporate exercise.
The deal means that shareholders of Sunrise will still be able to profit from the potential future earnings of the combined group.
UEM Land is the developer of Nusajaya in Johor.
The company has 3,400ha of undeveloped land in Nusajaya, targeted to be developed by 2025.
It is also learnt that Tong will become a director of UEM Land and he will also chair the development committee of the group.
By Business Times
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