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Published on November 1, 2007

The Major Cineplex Group will acquire half of event organiser and entertainment company Traffic Corner Holdings through a share swap with Major subsidiary M Pictures.

The deal will create synergy for both firms, because Major will be able to use a magazine published by Traffic Corner to promote films, while Traffic Corner will benefit from Major's extensive network.

Major CEO Vicha Poolvaraluck yesterday said his company would sell its 799,993 shares in M Pictures to Traffic Corner in return for 184 million capital-increase shares in Traffic Corner.

Traffic Corner plans to buy an additional 200,000 shares in M Pictures from Suchin Satitputtana-pan, after which it will own 99.99 per cent of M Pictures, which holds licences for local and international film rights for cinema screenings, VCD and DVD release and broadcast via cable or free-to-air television.

M Pictures recorded a first-half net loss of Bt14 million.

The 184 million shares in Traffic Corner are part of the company's recent issue of 240 million capital-increase shares. After the allocation to Major, the remaining shares will be earmarked for existing shareholders at a ratio of two new ones for every share held, at a price of Bt1.79 apiece.

Traffic Corner's registered capital will then be raised to Bt360 million, from Bt120 million before.

"The share swap will help synergy and strengthen Major's business. It will support our business from next year," Vicha said.

The deal will be completed early next year.

Shares in both Major Cineplex and Traffic Corner resumed trading yesterday after they were halted before Tuesday's afternoon session. Major closed yesterday at Bt17.70, up 1.14 per cent, while Traffic Corner closed at Bt2.62, up 29.7 per cent.

Traffic Corner representative Suraphong Triamchanchai said a meeting of the company's shareholders would be convened this month to approve the transaction. He estimated that Traffic Corner would record sales revenue of Bt300 million this year, which would double to between Bt600 million and Bt700 million after Major became its major shareholder.

Stock Exchange of Thailand data show that as of April 11, Supatra Paiboonbha-nupong was Traffic Corner's largest shareholder, with a 14.43-per-cent stake, followed by Wirat Udomsinwat-tana (13.78 per cent) and Taweesak Chalakornkanok (8.68 per cent). "The partnership will help raise our efficiency and widen our revenue sources. Our business structure will remain unchanged, but we'll have to improve our competitiveness," Suraphong said.

An Adkinson Securities analyst said Traffic Corner would suffer a 30-40-per-cent dilution effect after the share allocation but that the company's competitiveness would be increased once Major stepped in. As well, the deal will cultivate a positive image for Traffic Corner.

Siriporn Chanjindamanee

 The Nation