Why UEM Land acquires Sunrise?

About the offer…

On 4th November 2010, UEM Land Bhd plans to take control of Sunrise Bhd in a RM1.4bil deal. Shareholders of Sunrise are given 2 options:
  1. UEM Land to acquire Sunrise shares at RM2.80 via the issuance of UEM Land shares at RM2.10 each, or
  2. Sunrise shareholders get 2.80 redeemable convertible preference shares (RCPS) for every one offer share.
 
Why Sunrise?

Reasons given by UEM Land were:
  • Leveraging on Sunrise Group's robust financial strengths and prospects
  • Accelerate UEM Land's own business expansion
  • To secure new development projects
  • And, to create another Capital Land (Singapore state-own company which is one of Asia's biggest property developers)

After the deal is completed…
  • UEM Group's shareholding in UEM Land will fall to around 60%
  • Major shareholder of Sunrise will have stake of around 9% in UEM Land
  • Sunrise will be delisted from Bursa Malaysia
  • But, the brand name of Sunrise will be retained
  • Creating an enlarged group with combined asset base of over RM5bn


Finance Malaysia thinks that the acquisition would compliment UEM Land's lack of expertise in high-rise, high-end property development. What UEM Land's business was in macro township development, such as the Nusajaya project. Mont Kiara, being the award winning development by Sunrise, is a clear example. UEM Land knows that Nusajaya would NOT be perfect without a brand and expertise such as Sunrise's.



Anyway, FM doubts whether the offer will go through smoothly with a mere 11% premium being offered to Sunrise's shareholders. Moreover, Sunrise was planning to launch 4 projects with total gross development value of RM3.2bn soon.

Comments

Post a Comment

Popular posts from this blog

Exclusive Interview: 2011 8TV Hot Chef (美食型男) Jason Cha

Image
Dubbed as one of the most handsome guy among the participants of popular 8TV shows Hot Chef ( 美食型男 ), Jason emerged as the ultimate winner, not by his look, but his cooking skills. Since then, he became a familiar face in Malaysia. Did you recognize Jason shopping at Mid Valley lately? In order for us to understand more about him, below are some of the his personal details: Full Name            : Cha Kian Heng Age                      : 34 Hometown           : Ipoh, Perak Status                  : Married Hobby                  : Collecting Thai Amulets Favourite Foods : Italian Pizza with many many cheese Favourite Sports : Badminton Favourite Sportsman : Fernando Torres (football player of Spain and Chelsea currently) The Interview: Q: What makes you decided to join the 8TV's 2011 Hot Ch...
Read more

Career Lessons from Breaking Bad

Image
AMC's Breaking Bad ended with a bang last Sunday, leaving viewers generally content and definitely shell shocked. Though the ride is over, we can finally look back at the series and reflect on how we can learn from both Heisenberg's victories and mistakes. How can a meth kingpin help you and your future careers? Here are some takeaways : 1. Be hard to replace   : Find a specific skill set and make sure you are good enough that nobody can quickly take your place. Whether it be modeling, analysis, writing, communication, or even a certain product with a 99.1% purity, having a specific niche or strength can ensure job security. Just try not to kill fellow associates to eliminate competition. 2. Associate with the right people : If you are the smartest person in the room, you're in the wrong room. Surround yourself with people who you believe can bring out the best in you. Doing business with a high school dropout and drug addict will certainly lead to complications in the fut...
Read more

Things We Now Know

The poor are losing ground in the new Obama world.  The facts are showing up even in the halls of collectivist extremes like the New York Times.  The rich are getting richer and poor are being locked in place.  Big government is throttling the economy and the hopes and dreams of lower and middle class Americans. Today's Wall Street Journal's article by Simon Constable lays out some of the simple and obvious facts of the Obama era: "The richest 20% of households account for 38% of spending, according to government data for 2011, the latest available.  Compare that with 2003 when the top earners spent 26% of the total."  The article goes on to say..."it could get even worse."  It will. Who really benefits when the regulators strangle the banks?  Do banks really need to get much more conservative in their lending practices?  Why does the government know best?  How far can you stretch the FDIC guarantees before American banking is simply a subsid...
Read more