Property company Ideal United Bintang International Bhd has proposed to purchase stakes in three property firms in Penang from its executive chairman for RM353mil to be satisfied by new shares in Ideal United.
In a Bursa Malaysia statement issued on Monday, Ideal United had proposed to purchase the entire stakes in Modular Platinum Sdn Bhd, Ideal Homes Properties Sdn Bhd and Premium Flame Development Sdn Bhd from Tan Sri Ooi Kee Liang and Puan Sri Phor Li Wei.
In the corporate exercise, Ideal United had proposed to place out 393.08 million new shares or 30% to independent investors. Assuming an indicative issue price of RM1.02 per placement share, the placement would raise up to RM200.5mil.
It also announced a share split of one current share into two.
The company said the proposed acquisition was a related party transaction as Ooi and Phor are common directors and shareholder in the three companies. They indirectly hold 54.07% of Ideal United through their shareholdings in ICT Innotech Sdn Bhd.
"The proposed acquisition represents an opportunity for Ideal United to bolster its current portfolio of development projects and enhance its profile as a property developer by participating in more property development projects which are profitable," it said.
It added the prospects of the projects undertaken by the three companies and the outlook of the property market in Penang, the board viewed the proposed acquisition would enable the company to expand into the property development industry at this juncture.
Ideal United said the new shares for the proposed acquisition would strengthen the company's financial position with enhanced shareholders' funds.