Hua Yang to up stake in Magna Prima to 30.96%

KUALA LUMPUR (April 20): Hua Yang Bhd is planning to up its stake in Magna Prima Bhd by 20.12% or 66.89 million shares, for RM123.75 million or RM1.85 per share, to 30.96%.

Hua Yang’s wholly-owned subsidiary Prisma Pelangi Sdn Bhd has inked a conditional share sale agreement with Fantastic Realty Sdn Bhd and five other individuals for the proposed acquisition, according to Hua Yang’s Bursa Malaysia filing yesterday.

On completion of the proposal, Magna Prima would become an associate of Hua Yang, which now has a 10.84% stake in Magna Prima, acquired on Jan 25.

Hua Yang said the purchase consideration represents a premium of about 21.71% to RM1.52, the five-day volume weighted average price of Magna Prima shares up to April 12 this year. Hua Yang said the proposed buy forms part of its objective of investing in companies which hold landbank in strategic locations that are easily accessible and surrounded by ready amenities. It will also create an avenue for Hua Yang to explore potential collaboration or joint-venture opportunities with Magna Prima in future.

The stake buy requires Hua Yang shareholders’ approval. The group expects to complete the exercise by the second quarter of this year.

In a statement, Hua Yang chief executive officer Ho Wen Yan said subsequent to the group’s acquisition in January this year, the group foresees significant opportunities and synergies between the two companies. “Our decision to increase our stake is a reflection of this confidence. This move also reaffirms our commitment to strengthen the group’s presence in the Klang Valley,” he said.

“This collaboration also provides business opportunities, management synergies, cost-efficiencies and potential for expansion for both organisations. Hua Yang will also be able to expand its market presence and recognise a proportionate share of Magna Prima’s future profits,” Ho explained.

This article first appeared in The Edge Financial Daily, on April 20, 2017.

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