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14-05-2012, 09:05 AM
Hi all
I am trying to understand the pricing mechanism for RTO deal. What is exactly in store for the listed stock (which is taken over by the private company)?
E.g. Bright Orient was trading at 3.5 cents before the RTO deal announcenment (see below). If it trades at 6 cents after the news,does it mean that the market premium extracted is 70%?
Does this mean that the original shareholders of Bright Orient will stand to gain 70% for each share of Bright Orient that they are holding to now? How does all the work?
Tks.
*******
Bright Orient in deal to acquire property assets
Reverse takeover deal with vendors of China-focused developer Ngee Lian
BY
JASMINE NG
BRIGHT Orient (Holding) Ltd, the textile company that became a cash company after it ceased its operating business, has struck a reverse takeover deal to acquire privately-held Ngee Lian Holdings for $83.5 million.
Ngee Lian, a Singapore-incorporated property developer with a focus on China, is principally engaged in developing integrated commercial and residential projects in third tier cities in that country.
The proposed takeover comes just days ahead of a May 15 deadline for Bright Orient to meet the requirements for a new listing or risk losing its Catalist listing status. Bright Orient said it intends to seek an extension of time.
The deadline came about after Bright Orient became a cash company following the disposal of its loss-making subsidiary Shenzhen Fengdan Industrial Co Ltd.
In its announcement yesterday, Bright Orient said that under the proposed deal, it will issue as consideration 417.5 million consolidated Bright Orient shares at 20 cents apiece. This will result in the vendors owning 94.39 per cent of Bright Orient.
The firm said that the purchase consideration was determined at arm's length and on a willing buyer-willing seller basis on the agreement that Ngee Lian's revalued net asset value (RNAV) will be at least 486 million yuan ($95.93 million).
Bright Orient believes that the proposed acquisition will provide an opportunity for the firm to acquire an entity with an operating track record in the business of property development in the PRC.
In January 2008, Bright Orient said that it would buy a bulk carrier and port operation business, Golden Oriental, in a reverse takeover deal worth some $160.5 million. But the deal has subsequently fallen through.
The stock, in which share trading was halted yesterday pending an announcement, was last traded at 3.5 cents. Trading resumes today.
I am trying to understand the pricing mechanism for RTO deal. What is exactly in store for the listed stock (which is taken over by the private company)?
E.g. Bright Orient was trading at 3.5 cents before the RTO deal announcenment (see below). If it trades at 6 cents after the news,does it mean that the market premium extracted is 70%?
Does this mean that the original shareholders of Bright Orient will stand to gain 70% for each share of Bright Orient that they are holding to now? How does all the work?
Tks.
*******
Bright Orient in deal to acquire property assets
Reverse takeover deal with vendors of China-focused developer Ngee Lian
BY
JASMINE NG
BRIGHT Orient (Holding) Ltd, the textile company that became a cash company after it ceased its operating business, has struck a reverse takeover deal to acquire privately-held Ngee Lian Holdings for $83.5 million.
Ngee Lian, a Singapore-incorporated property developer with a focus on China, is principally engaged in developing integrated commercial and residential projects in third tier cities in that country.
The proposed takeover comes just days ahead of a May 15 deadline for Bright Orient to meet the requirements for a new listing or risk losing its Catalist listing status. Bright Orient said it intends to seek an extension of time.
The deadline came about after Bright Orient became a cash company following the disposal of its loss-making subsidiary Shenzhen Fengdan Industrial Co Ltd.
In its announcement yesterday, Bright Orient said that under the proposed deal, it will issue as consideration 417.5 million consolidated Bright Orient shares at 20 cents apiece. This will result in the vendors owning 94.39 per cent of Bright Orient.
The firm said that the purchase consideration was determined at arm's length and on a willing buyer-willing seller basis on the agreement that Ngee Lian's revalued net asset value (RNAV) will be at least 486 million yuan ($95.93 million).
Bright Orient believes that the proposed acquisition will provide an opportunity for the firm to acquire an entity with an operating track record in the business of property development in the PRC.
In January 2008, Bright Orient said that it would buy a bulk carrier and port operation business, Golden Oriental, in a reverse takeover deal worth some $160.5 million. But the deal has subsequently fallen through.
The stock, in which share trading was halted yesterday pending an announcement, was last traded at 3.5 cents. Trading resumes today.
