Published 22 September 2006
SEA Holdings Ltd will take the London-listed Asian Growth Properties Ltd inhouse under a proposal for AGP to acquire SEA’s main Hong Kong & China property portfolio for $HK4.43 billion ($NZ860 million).
Asian Growth Properties Ltd, the Hong Kong-based offshoot of Trans Tasman Properties Ltd which is now only 2.5% owned by the New Zealand company, announced the conditional portfolio purchase on 19 September.
SEA, also of Hong Kong and headed by Jesse Lu, plans to sell Asian Growth a portfolio of 6 properties in Hong Kong & China currently held by another subsidiary, the Target Group.
Asian Growth said: “Due to the size of the transaction relative to the size of AGP and SEA’s shareholding in AGP, the proposed transaction constitutes a related-party transaction and a reverse takeover for AGP under the AIM (London Stock Exchange alternative investment market) rules.”
SEA split Asian Growth off from Trans Tasman at the end of last year, listing it on AIM in January. At that time SEA held 69.7% of Asian Growth but has since increased its stake to 85.42%. SEA’s stake in Trans Tasman slipped back to 51.9% at the split in January but under a takeover offer it’s got that stake up to 78%.
On completion of this deal, SEA would hold 96.42% of Asian Growth.
AGP had total assets of $HK2.2 billion, net assets of $HK1.6 billion, at 30 June. Target is much bigger, holding total assets of $HK7.74 billion, net assets of $HK4.4 billion.
SEA proposes to buy 668.7 million Asian Growth shares at 40p/share â€“ a 19.7% premium over the average trading price in the past 3 months and an 18.8% discount to net asset value at 30 June.
“The board (of Asian Growth) considers this transaction to be fair & reasonable and that the 14.17% dilution in net asset value/existing ordinary share on completion of the transaction impacting shareholders is, in the opinion of the board, more than compensated by the quality, value & potential of the property portfolio being purchased from SEA.”
The transaction is subject to the approval of Asian Growth shareholders at a meeting in Hong Kong on Wednesday 4 October (5pm local time).
3 of the assets Asian Growth will buy are on Hong Island, one in the New Territories, 2 in China:
Dah Sing Financial Centre, Wanchai, 39 storeys, 88.3% let
A floor in a 35-storey Queen’s Rd, Central, building
A 30-storey 206-room hotel development under construction at Leighton Rd, at the junction of Causeway Bay & Happy Valley
Target’s 55% interest in the 922-unit Royal Green residential development, due for completion in November at Sheung Shui, New Territories
Plaza Central, Chengdu, Sichuan Province in China, 2 new 30-storey office blocks 97% owned by Target
Westmin Plaza phased 2, Guangzhou, a 1.3ha site with a mixed-use development under construction
Website: Asian Growth Properties
Attribution: Company statement, story written by Bob Dey for this website.