SCG Building Materials, fully owned by Siam Cement, has signed a memorandum of understanding to acquire a 51-per-cent stake worth Bt814 million in Quality Construction Products, the Stock Exchange of Thailand was told yesterday.
Siam Cement president Kan Trakulhoon issued a statement saying the investment would help its building-materials unit offer more products.
Meanwhile, QCP announced its major shareholders - Land & Houses (L&H), Quality Houses, QH International and Asian Property Development - had signed the MoU to sell the 51-per-cent stake for Bt4 a share.
L&H is selling 10.25 per cent of its stake, or 40.99 million shares, but will continue to hold 84.62 million shares, or 21.16 per cent of the firm. Quality Houses is selling 97.32 million shares (24.33 per cent), followed by QH International's 5.8 million shares (1.45 per cent) and Asian Property Development's 59.8 million shares (14.97 per cent).
However, the MoU has three conditions.
The first is that QCP's major shareholders sell no less than 51 per cent of the company's issued securities to SCG Building Materials and that the shares be transferred at the same time.
Second is the sale and purchase of the securities be approved by both the SCG Building Materials' board of directors and Quality Construction's major shareholders.
And third is they signed the share-purchase and other related contracts with the major shareholders.
MOU'S CONDITIONS
The MoU can be terminated if the above conditions are not met within a month, or if there is any material change to Quality Construction's share value, or if its business is negatively affected by the transaction.
If the MoU's conditions are achieved, SCG Building Materials can proceed with the mandatory tender offer according to relevant laws and regulations.
Meanwhile, DBS Vickers Securities (Thailand) said the deal would be good news for Quality Construction's minority shareholders, because the agreed upon Bt4 per share - which should be the tender price - was much higher than the market price of Bt3.16 prior to the announcement.
"We also see positive news for Asian Property Development, Quality House and L&H, because they should all realise gains from the sale of their stakes in Quality Construction.
"We expect the transaction to be completed in the first quarter and to see a large positive impact from the share sale and thus maintain a 'buy' rating on the stock," the research house said.
Quality Construction closed at Bt3.88 yesterday, up 72 satang; L&H closed at Bt5.65, up 15 satang; Quality Houses closed at Bt2.20, up 4 satang; Asia Property Development closed at Bt4.92, up 22 satang; and Siam Cement closed at Bt214, down Bt1.
