New World Development Co. Ltd. offered to buy all the shares it does not own in its department store business for roughly HK$934.5 million in cash.
The company said that if its offer succeeds — which means that at least 90% of the shares subject to the offer are tendered and accepted by New World Development at the HK$2.00-per-share offer — taking New World Department Store China Ltd. private will allow it to "develop deeper synergies" within the business, explore new development opportunities and implement long-term growth strategies.
New World Development said the move will also consolidate its real estate portfolio into one flagship. The buyout also comes a little over a year after it closed on taking its Chinese property arm private for about HK$21.32 billion.
The $2.00-per-share offer is a roughly 60.7% premium to the business' average closing price over the last 30 trading days and values the company at approximately HK$3.37 billion.
According to a joint statement, there were 1,686,145,000 New World Department Store shares in issue as of June 2, about 72.29% of which are owned by the parent.
If the offer meets the threshold, delisting the target on the Hong Kong bourse will also be considered. The offer will close 60 days after a composite document with more details about the offer is dispatched to shareholders.
A four-member independent board committee at New World Department Store was also established to evaluate the offer. It also plans to appoint an independent financial adviser in due time.
New World Department Store has 40 department stores and two shopping malls in mainland China.