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Saturday, March 15, 2014

St James and Perennial in $1.56b reverse takeover deal

Published on Mar 15, 2014

Acquisition will see St James' entertainment business taken private

By Mok Fei Fei And Ivan Teo

REAL estate developer Perennial Real Estate Holdings is set to be listed on the Singapore Exchange (SGX) in a $1.56 billion reverse takeover deal.

Listed entertainment operator St James Holdings will be transformed into a real estate developer once the deal goes through.

Under the plan, Perennial's assets will be injected into St James, which will pay $1.56 billion by issuing new shares at a price of 2.35 cents per share, representing 99.27 per cent of its own enlarged share capital.

St James' existing leisure and entertainment business will be divested and taken private. It will return the business to shareholders, it announced yesterday.

Following the acquisition, St James will also consolidate every 50 shares into one share, bringing the issue price to $1.1756.

St James' controlling shareholders, comprising Dennon Entertainment, EK Capital and FJ Benjamin Concepts, which now own a combined stake of about 57 per cent of the firm, have stated they will vote in favour of the deal at an extraordinary meeting.

If the acquisition goes through, St James will be more than 70 per cent controlled by a team of prominent businessmen and their partners. They include Perennial president and retail mall veteran Pua Seck Guan, Wilmar chairman Kuok Khoon Hong and Osim founder Ron Sim.

After the proposed acquisition, an offer will be made by St James to acquire all units of Perennial China Retail Trust (PCRT) at a price of 70 cents per unit via a share swap. Perennial is the sponsor of PCRT.

St James will be renamed Perennial Real Estate Holdings Limited (PREHL). The ultimate aim is for PREHL to become a listed entity that combines Perennial's vast assets in both Singapore and China.
Mr Pua told The Straits Times there are plans for the new company to expand beyond Singapore and China to other countries in the region, such as Myanmar.

"We're very excited about this new platform. We can rationalise all the businesses we have together and take advantage of other opportunities in the market, backed by strong shareholders who know those overseas markets."

St James is ending its gig as a listed entity. Its chief executive, Mr Dennis Foo, noted that it costs almost $800,000 a year to be listed.

"Nightlife and entertainment is a challenging industry, especially in the face of high cost and labour crunch... St James will eventually become a private enterprise again," he said.

St James and PCRT both called for a trading halt yesterday at around 2pm. The deals were announced after 5pm, when markets closed. St James shares added 0.1 cent to 5.4 cents, while PCRT was last transacted at 54.5 cents, down half a cent.

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