Magma ends RM60.9 million LUMA Hotel acquisition plan
The proposed cash-and-shares transaction covered the hotel business in Kota Kinabalu and four adjoining buildings.
Magma Group Bhd said it will not proceed with its RM60.9 million proposal to buy the LUMA Hotel business in Kota Kinabalu and four adjoining buildings. In a bourse filing, the company said its subsidiary and the vendors had agreed to end the transaction.
The decision followed additional discussions involving Magma Avenue Sdn Bhd and the vendors. No reason was given for terminating the heads of agreement, which had been signed in March as part of Magma’s hotel portfolio expansion strategy.
The terms provided for Magma to purchase a 100% stake in HH Home Hotel Sdn Bhd for RM12.8 million, with payment comprising cash and 27.15 million new shares. HH Home Hotel owns both the hotel and its brand.
The proposal also covered a building owned by HKT Realty Sdn Bhd and another owned by Gamwon Properties Sdn Bhd. Each carried a price of RM16 million, payable through cash and 14.55 million Magma shares.
For the remaining buildings, Magma had planned to buy Zenith Everise Sdn Bhd from Wong Siew Ong and Aaron Chin Chen Nyap for RM7.6 million, using cash and 16.36 million shares. It also intended to purchase Upper Domain Sdn Bhd from Wong and Lee Ka Yi for RM8.5 million, using cash and 19.09 million shares.
Magma’s closing share price on Nov 13 was unchanged at 25.5 sen, putting its market value at RM492.17 million.
