KUALA LUMPUR: Sunway Sdn Bhd (Newco) has proposed to merge Sunway City Bhd (SunCity) and Sunway Holdings Bhd (Sunway) by acquiring all of their assets and businesses, the companies announced to Bursa Malaysia on Wednesday, Nov 24.

Newco, which names Sunway and SunCity chairman Tan Sri Dr Jeffrey Cheah Fook Ling as one of its directors, had made the offer on Wednesday at RM5.10 per SunCity share and RM1.29 per SunCity warrant as well as RM2.60 per Sunway share and RM1.50 per Sunway warrant.

The offer price for both companies will be satisfied by a combination of Newco shares at RM2.80 apiece (80% of the consideration) and cash (20% of the consideration), as well as warrants on the basis of one warrant for every five Newco shares, issued for free.

Following the disposal of their businesses and projects, the companies will undertake a capital reduction and repayment exercise where their respective share capital will be reduced to RM2 comprising two SunCity shares and two Sunway shares each.

The companies will also undertake an exercise to validly cancel out all outstanding and unexercised warrants.

SunCity warrantholders will receive RM1.29 per warrant via a combination of Newco shares (80%) and cash (20%).

Meanwhile, Sunway warrantholders will receive RM1.50 per warrant via a combination of Newco shares (80%) and cash (20%).

Warrantholders of both companies are also entitled to Newco warrants on the basis of one warrant for every five Newco shares.

Upon completing the proposed capital repayment and warrant scheme, both Sunway and SunCity will be delisted and Newco will in turn apply to be listed on Bursa Malaysia.

The newco said the combined groups will create scale and synergies and "realise operational, procurement and administrative efficiencies, resulting from economies of scale and integration".

"The larger combined entity provides an opportunity to re-articulate the 'Sunway' brand and renew foreign investors' interest in Newco Group," said the Newco.

The acquisitions are scheduled for completion within 120 days after the conditions precedent have been satisfied on time and Bursa Malaysia has approved listing of the new entity.
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