Company Announcements

Date : 28 March 2013

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): RELATED PARTY TRANSACTIONS LATITUDE TREE HOLDINGS BERHAD (“LTHB” OR “COMPANY”) PROPOSED ACQUISITION OF ALL THE SUBSIDIARIES OF LATITUDE TREE INTERNATIONAL GROUP LTD (“LTIGL”) FOR A REVISED AGGREGATE CONSIDERATION OF SGD48,750,000.00 (RM121,509,375.00) (“PROPOSED ACQUISITIONS”)

LATITUDE TREE HOLDINGS BERHAD

TypeAnnouncement
SubjectTRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
RELATED PARTY TRANSACTIONS
DescriptionLATITUDE TREE HOLDINGS BERHAD (“LTHB” OR “COMPANY”)

PROPOSED ACQUISITION OF ALL THE SUBSIDIARIES OF LATITUDE TREE INTERNATIONAL GROUP LTD (“LTIGL”) FOR A REVISED AGGREGATE CONSIDERATION OF SGD48,750,000.00 (RM121,509,375.00) (“PROPOSED ACQUISITIONS”)

(Unless otherwise stated, the exchange rate of Singapore Dollar (“SGD”) 1.00: RM2.4925, being the middle rate published by Bank Negara Malaysia (“BNM”) on 26 March 2013, has been used throughout this announcement.)

This announcement is dated 28 March 2013.

Reference is made to the announcements dated 5 February 2013, 28 February 2013 and 15 March 2013 in relation to the offer made by LTHB (“Offer”) vide its offer letter dated 5 February 2013 to LTIGL in relation to the Proposed Acquisitions (“Offer Letter”) (“Announcement(s)”).

Unless otherwise stated, the capitalised expressions used throughout this announcement shall have the same meaning as defined in the Announcements.

On behalf of the board of directors of LTHB, AmInvestment Bank Berhad wishes to announce that following negotiations between LTHB and LTIGL, AmInvestment Bank had, on behalf of LTHB, served a supplemental letter of offer (“Revised Offer Letter”) to the board of directors of LTIGL on 28 March 2013 to increase the aggregate consideration for the Proposed Acquisitions to SGD48,750,000 (“Revised Purchase Consideration”). The non-interested Directors of LTIGL have agreed on even date to accept the revised offer made by LTHB (“Revised Offer”).

Save for the Revised Purchase Consideration, all other terms and conditions of the Offer Letter remain unchanged under the Revised Offer.

The Proposed Acquisitions are, subject to, amongst others, the share sale agreement comprising the terms and conditions to be agreed upon by LTHB and LTIGL (“SSA”), the approval of the shareholders of LTIGL and LTHB and the relevant regulatory authorities, where required.

The Revised Purchase Consideration shall be satisfied in the following manner:-

(i) by way of set-off against the capital due to be returned to LTHB amounting to the sum of SGD46,444,200.00 following the cancellation of 186,000,000 ordinary shares in LTIGL held by LTHB pursuant to a selective capital reduction exercise proposed to be carried out by LTIGL (“Proposed SCR”) within four (4) weeks (or such other timeframe as LTHB determines in consultation with LTIGL) after the satisfaction of all the conditions precedent (“Completion Date”) as stipulated in the Offer Letter; and

(ii) the balance of the Revised Purchase Consideration of SGD2,305,800.00 to be paid in cash (“Cash Portion”) on Completion Date.

The Revised Purchase Consideration of SGD48,750,000.00 (equivalent to approximately RM121,509,375.00) per LTIGL Share represents a:-

(i) price-earnings multiple of approximately 4.19 times based on the unaudited trailing twelve (12) months results of the Target Companies up to 31 December 2012 of SGD11.64 million; and

(ii) price-to-book multiple of approximately 0.98 times based on the unaudited net assets attributable to the equity holders of the Target Companies of SGD49.77 million as at 31 December 2012.

Based on the Revised Purchase Consideration and the audited consolidated financial statements of the Target Companies for the financial year ended 30 June 2012, the Proposed Acquisitions are expected to result in LTHB recording a net gain of approximately RM8.68 million as a result of the recognition of negative goodwill arising from the Proposed Acquisitions. However, the final amount of the net gain can only be determined upon the completion of the Proposed Acquisitions.

The Proposed Acquisitions are expected to be completed by the first (1st) half of calendar year 2013. The Proposed Acquisitions are expected to contribute positively towards the earnings and EPS of LTHB Group for the FYE 30 June 2013 as it would allow LTHB to fully consolidate the financial results of the Target Companies.

After having considered all aspects of the Proposed Acquisitions (including the abovementioned revised terms and conditions of the Revised Offer), the Board of LTHB (save for the Interested Major Shareholders/Directors) is of the opinion that the Proposed Acquisitions are fair, reasonable and on normal commercial terms and are not detrimental to the interest of the minority shareholders. The Board (save for the Interested Major Shareholders/Directors) is also of the opinion that the Proposed Acquisitions are in the best interest of the LTHB Group.

The Company wishes to announce that the submission of the draft circular to the shareholders of LTHB and the independent advice letter to the non-interested shareholders of LTHB to Bursa Securities shall be made within two (2) months from the date of execution of the SSA pursuant to the Proposed Acquisitions.


Announcement Info

Company NameLATITUDE TREE HOLDINGS BERHAD  
Stock Name LATITUD    
Date Announced28 Mar 2013  
CategoryGeneral Announcement
Reference NoMB-130328-51472

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