Furama Hotel Enterprises soared 23 per cent yesterday after

Lai Sun Development's announcement that it was buying 45.52 per cent

of the hotel firm from its majority owner, the Adrian Fu family.

Furama shares, which resumed trading after a two-day suspension, were

up $6 to end at $32 yesterday.

The company's share price reached a high of $33 yesterday while the

low was $30.90.

The trade volume was 2.19 million shares worth $69.96 million.

Analysts said the high premium offered by Lai Sun for Furama shares

fuelled heavy buying for the stock.

ADVERTISEMENT

Lai Sun said it would buy the 45.42 per cent stake in Furama Hotel at

$33.50 per share for $3.13 billion.

It would also make an offer at $33.50 per share for the remaining

shares which would cost $6.893 billion when the takeover is completed.

But it plans to retain Furama's stock market listing.

Analysts said the $33.50 per share price tag was very aggressive as

Furama was trading at the $13 level a month ago.

Furama Hotels' net profit was $224.2 million in the year to March last

year, a 38 per cent increase compared with the previous year's. They

expect to earn $260 million this year.

Shares in Lai Sun Development gained 45 cents to $8.95 yesterday after

trading was suspended for two days.

Though Lai Sun Development did not state any redevelopment plan for

Furama Hotel, analysts believed Lai Sun would transform the hotel and

its Ritz-Carlton hotel in the adjacent lot into an office complex.

With a plot ratio of 15, the combined site area of 40,000-square-feet

could provide a total floor area of 600,000 sq ft. Analysts estimated

Lai Sun would be able to sell the office block for as high as $10

billion.

But there was talk that an agreement had been reached between Lai Sun

Development and Furama Hotels that there would be no redevelopment for

at least three years.

All rights reserved.