Published on July 24, 2006 - More than half of stock targeted at an expected price of Bt7-Bt9 per share

Dusit Thani Plc is planning to take over embattled Pacific Assets Plc at a stock price expected to be Bt7-Bt9 per share.

Ayudhya Securities Plc is the financial adviser to the quality-hotel operator on the deal.

A source close to the deal said the takeover deal had been a key factor causing Pacific Assets stock to rally in speculative trading over the past few weeks.

Pacific Assets operates hotels and serviced-apartment and office buildings.

The source said the hotel-operator wanted to buy more than 50 per cent of Pacific Assets' shares from its major shareholders and there would then be a tender for the public.

According to Securities and Exchange Commission regulations, anyone buying a listed company's shares exceeding certain levels - 25 per cent, 50 per cent and 75 per cent - is required to conduct tender offers for the public, offering minor shareholders a chance to sell shares at the same price as major shareholders.

Dusit Thani has already completed due diligence on Pacific Assets' assets and liabilities. The existing major shareholders of Pacific Assets are expected to sell their shares to Dusit Thani at Bt7-Bt9 apiece.

"The agreed price has brought about speculation on Pacific Assets shares, with the price

hitting the ceiling on two consecutive days," the source said.

"We will have to keep an eye on this as they reach a final price."

Pacific Assets' stock price closed at Bt7.7 on Friday, up Bt0.55 or 7.69 per cent from the previous day. Over the past month, the stock price has gone up 77 per cent.

Earlier, Thowthawal Subha-vanich, the chief executive of Pacific Assets, reported to the Stock Exchange of Thailand that no takeover deal had been reached.

He said his company would inform the SET as soon as there was clearer information.

Last week Chaninthorn Wongthongdee, a senior manager at Pacific Assets, said he had no idea why the company's share price was rising as there was no good news.

The company is planning to build a new hotel on Koh Samui by the end of this year, but the investment has not been concluded.

In addition, Pacific Assets opened a new hotel in Chiang Mai in March this year.

The upcoming Royal Flora Ratchaphruek 2006 to be held from November to January is expected to boost occupancy at the new hotel, which is located in a prime Chiang Mai area and has cheap rental rates.

As of April 5, Natural Park Plc held the majority stake in Pacific Assets with 63.4 per cent, followed by UOB Kay Hian Private Ltd with 10.77 per cent, Finansa Life Assurance with 2.92 per cent and Bangkok Bank with 2.69 per cent.

Siriporn Chanjindamanee
The Nation