KUALA LUMPUR (Oct 28): UEM Sunrise Bhd said today that it needs more time to decide on its proposed merger with Eco World Development Group Bhd (EcoWorld) due to the size and complexity of the exercise.
It has requested an extension of time to respond on the proposal to Jan 2 next year, from the initial deadline of Oct 30.
"Given the size and complexity of the proposed merger, the Board of UEM Sunrise is of the view that they require more time before deciding whether to proceed with negotiations on the proposed merger, and will revert with their decision by Jan 2, 2021," the group said in a filing with Bursa Malaysia.
UEM Sunrise added that it will make requisite announcements to Bursa Malaysia for any material developments in relation to the proposed merger in due course.
On Oct 5, UEM Group Bhd announced its proposal to merge its property development arm UEM Sunrise with EcoWorld, in a deal that will entail an exchange of securities, confirming a previous report by The Edge.
UEM Group said it proposed the merger as it saw a "pressing need for industry players to consolidate resources and capabilities" to withstand the headwinds that property developers are currently facing.
Under the deal, new shares in UEM Sunrise will be issued at a proposed 44.3 sen each to holders of EcoWorld shares — for all shares held in the latter at an exchange price of 46.9 sen.
Upon completion of the proposed merger, EcoWorld will become a wholly-owned subsidiary of UEM Sunrise and be delisted.
Shares of UEM Sunrise fell 0.5 sen or 1.30% today to close at 38 sen, valuing the group at RM1.70 billion.
EcoWorld also finished at 38 sen, unchanged from yesterday, giving it a market capitalisation of RM1.12 billion.
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