Shares of Best Mart 360 (2360) soared 37 percent yesterday on the news that a mainland firm was preparing to take over the Hong Kong retail store operator in a deal that could be worth as much as HK$1.6 billion.
In a filing, Best Mart 360 said that controlling shareholders Lin Tsz-fung and Hui Ngai-fan have entered into a memorandum of understanding with China Merchants Hoi Tung Trading, in relation to the possible sale and purchase of the shares.
After the announcement, Best Mart 360's shares soared by 37.31 percent to HK$2.65 yesterday with a trading volume of HK$3.05 million.
Lin and Hui intend to sell, in equal share, a total of 490 million shares, representing 49 percent of the total issued shares. The price of the possible transaction was not disclosed.
At yesterday's closing price of HK$2.65 per share, the stake would be worth HK$1.3 billion.
Market analysts put the possible transaction price at about HK$3.3 per share and it is expected that the sellers could cash out more than HK$1.6 billion on the sale.
Under the MoU, the parties shall not enter into any arrangement or transaction with any third party that would in any way be inconsistent with or prevent the possible transaction for a period of six months after the execution of the MoU.
The agreement will be terminated if the parties have not executed a definitive sale and purchase agreement for the possible transaction within nine months from the date of the MoU.
Lin and Hui are executive directors of Best Mart 360 and both hold 375 million shares each, representing 37.5 percent of the total issued shares.
Best Mart 360 operates around 138 retail stores, spanning strategic locations, with heavy pedestrian flows in Hong Kong, Macau and Shenzhen.
The operator's stores were targeted and vandalized during the 2019 unrest by radical protesters over alleged links to pro-Beijing Fujian gangs.
China Merchants Hoi Tung Trading is a comprehensive trading company covering food, transportation, and commodity, with subsidiaries in 10 cities in China and seven branches overseas and is a wholly-owned subsidiary of China Merchants Group, which is a state wholly-owned enterprise in the mainland.
Best Mart 360 operates 138 stores. Sing Tao
