Catalist-listed food solutions provider Neo Group announced yesterday it is acquiring a 51 per cent stake in privately held How's Catering for up to $4.4 million in cash and shares.
The consideration for Ye Liang How Catering Service, which operates the How's Catering brand, will be split into $3.63 million in cash and 877,193 new Neo shares at 57 cents per share upon completion.
The issue price of the consideration shares is a 5.2 per cent premium to Neo Group's volume-weighted average price of 54.2 cents on Aug 29, the last day of trading before the deal was signed. The consideration shares will represent 0.6 per cent of Neo Group's enlarged share capital.
Neo Group said the earnings accretive acquisition will allow it to expand its customer base and promote cross-selling opportunities, tapping How's Catering's established corporate clientele. It added that by tapping Neo Group's procurement and logistics network, the merger will reap cost benefits and yield additional operational efficiencies.
Crane rental firm MS Holdings yesterday said it plans to explore a "strategic cooperation" with LongRunn International Group, a builder of integrated resorts in Asia, in acquiring a land parcel in the Incheon Free Economic Zone of South Korea.
The cooperation, based on a non-binding memorandum of understanding, will have the partners develop the land parcel into a casino amenity as well as a complex for residential, commercial and tourism uses. The proposed project is valued at about US$80 million (S$110.3 million).
MS Holdings said it expects the company to issue new shares representing 25 per cent of its enlarged share capital, in exchange for an 8 per cent stake in the proposed project.
The diversification strategy comes as the crane rental business remains challenging due to "intense competition as well as difficult market conditions" faced by its customers in the construction, marine, logistics, oil and gas, and infrastructure industries, MS Holdings chief executive officer Yap Chin Hock said in a media statement.
"The proposed partnership will enable us to diversify our business and participate in an integrated resort project which is conceptually similar to Singapore's Marina Bay Sands. We look forward to partnering LongRunn to shape and transform the site into a world-class integrated resort destination."