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Armada bought by state investment firm China Great Wall Asset Management for HK$1.57b

Armada Holdings, formerly known as SCMP Group, said on Friday its controlling shareholder Kerry Media has agreed to sell its entire 74.19 per cent stake in the company to state investment house Great Wall Pan Asia International Investment, for HK$1.57 billion in cash.

The deal, which represents HK$1.3459 per share, will require independent shareholder approval within five months.

China Great Wall Asset Management, which takes control of Armada via Great Wall Pan Asia International Investment, will become the new controlling shareholders.

The asset management firm is one of four owned by China’s Ministry of Finance, set up to trade distressed assets of the country’s five largest state-owned banks.

After the transaction, Great Wall will then be required to make a general offer, while another pre-condition involves Kerry Group allowing its subsidiary Kerry Properties to buy TV City Property from Armada, for HK$930 million.

The final sale price was determinated by the net asset value and book value of TV City Property, which is based at Clear Water Bay Studio in Hang Hau, Sai Kung in Hong Kong.

TV City Property cost HK$213 million in 1991, while the book value of the land involved was worth HK$893 million at the end of last year.

Armada is likely to have earned around HK$49 million when the land deal is completed. The board will pay out all proceeds via a special cash dividend, at about 59 HK cents per share.

In a statement, the company said the board considered the property deal “in the interest of the group’s shareholders” as the sale price is higher than the book value of the TV City Property.

The offer, together with the 59 HK cents special dividend and the HK$1.59 cash dividend after the sale of the South China Morning Post to Alibaba in April, now represents a total of HK$3.5334 per share paid to Armada shareholders.

The deal has a further pre-condition that Armada remains a listed company in Hong Kong.

Silchester International Investors, the second largest shareholder in the company with 14.12 per cent, has also executed an irrevocable undertaking in favour of the deal and accept the offer, the statement said.

The deal’s intention, said the statement, is to “provide the group [Armada] with more opportunities in the development of real estate projects in the People’s Republic of China” while it intends to keep the listed status of the company.

All existing directors of Armada will resign after completion of the deal while the new controlling shareholders will nominate a new board.

Armada has been suspended from trading since February 25, 2013 due to an insufficient public float.

SCMP Group and Alibaba Investment announced a sale and purchase agreement in December in relation to the disposal of the SCMP Group’s media assets for HK$2.06 billion in cash.

After the deal was completed, SCMP Group was renamed Armada Holdings.

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