A locally listed firm best known for starting sporting goods chain World Of Sports in 1991 is acquiring private company Sky Win Management Consultancy.
VGO Corp said in a Singapore Exchange (SGX) filing yesterday that the deal price will be decided on a later date and will be done through allocating and issuing new shares.
"The proposed acquisition may result in a reverse takeover" which is subject to SGX's and shareholders' approval, VGO added.
Sky Win Management Consultancy is owned by Mr Colin Tan June Teng and Mr Edwin Tan Ping Huang, who are better known as the brothers behind Malaysian-based developer Hatten Group.
VGO said a condition of the proposed acquisition is that the consultancy has to restructure, so that it directly or indirectly holds the share capital of five companies, including Hatten International and Malaysia-based firms such as Gold Mart.
The proposed acquisition is in line with the group's corporate strategy to venture into a new business area that has the potential for growth.
Sky Win and these units are involved in the business of property development in Malacca, Malaysia, and the provision of its related marketing and consultancy services in Singapore.
VGO, which also organises sporting events and distributes fashion brands, said: "The proposed acquisition is in line with the group's corporate strategy to venture into a new business area that has the potential for growth."
It noted that it was included on SGX watch list for failing to meet the new minimum trading price requirement that went into effect in March.
The new rule, which aims to curb speculation and market manipulation, requires all mainboard-listed shares to have a minimum price of 20 cents.
VGO said it has considered the options available to comply with the rule, adding that the acquisition will help to meet the requirement.
However, it added that "there is no assurance that the proposed acquisition will achieve the desired results, nor is there assurance that such results, if achieved, can be sustained in the longer term".
VGO is finalising the financial effects of the acquisition on its share capital, net tangible assets, earnings per share and gearing. It will hold an extraordinary general meeting at a later date.
VGO shares closed up 1.6 cents to 14.4 cents yesterday.