Lifestyle International (1212), which operates SOGO Department Store, was suspended from trading on Friday (5th) pending the release of inside information on acquisitions and mergers.
The company’s latest announcement stated that Liu Luanhong (the Offeror), a major shareholder, known as “Xi Liu”, proposed to privatize the company by means of a plan and arrangement. The offer price was 5 yuan per share, a premium of about 75.93% over the company’s closing price of 2.842 yuan before the suspension of trading. , which is 2.87 times higher than the company's net asset value at the end of June this year.
At present, Xi Liu holds 74.91% of Lifestyle International, and planned shareholders including independent shareholders hold 376 million shares. In other words, he will spend up to 1.884 billion yuan for privatization.
The circular added that the offer price will not be increased and that the offeror does not reserve the right to do so.
If the Offer is successful, the Company will apply to the Stock Exchange for delisting of the Shares on the Stock Exchange.
Profit and loss in the first half of the year
Lifestyle International is mainly engaged in department store business, including Causeway Bay Sogo, Tsim Sha Tsui Sogo, and also operates He Sammai restaurant, as well as holding London properties and other equity and debt investments.
Affected by the epidemic and the lack of "customs clearance", the retail industry in Hong Kong has been hit hard, which has caused Lifestyle International's profits to distort in recent years.
Lifestyle International turned from profit to loss in the first half of the year, with a loss of 475 million yuan and a loss of 0.317 yuan per share.
The group earned 220 million yuan in the same period last year.
On the one hand, revenue fell by 12.8% to RMB 927 million, mainly due to a decrease of approximately 11.8% in self-operated sales and a decrease of approximately 15.7% in commission income from post-sale orders and franchise counter sales.
On the other hand, due to investment in domestic real estate bonds, etc., an investment loss of 455 million yuan was recorded.
It is worth mentioning that the share price of Lifestyle International has lost its color. From about 10 yuan upstairs before the epidemic, it has plummeted to the level of 3 mosquitoes before the suspension, and it has been left at 2.59 yuan.
Sogo Department Store property in Causeway Bay is accounted for at cost only
When it comes to Lifestyle International's most valuable asset, the Sogo Department Store property in Causeway Bay is none other than the property.
According to reports, the company's financial director Pan Fuquan revealed at the 2017 performance meeting that the market valuation of the Sogo Department Store property in Causeway Bay was about 20 billion yuan, but it was only recorded at a cost of 1.7 billion yuan.
At the same time, Lifestyle also won the king of commercial land in Kai Tak with an "astronomical price" of 7.388 billion yuan in 2016, with a land price of 6,733 yuan per square foot.
The Kai Tak site covers an area of about 14,100 square meters and is being developed into two commercial buildings, providing about 101,000 square meters of retail space, which is expected to become the future growth driver of Lifestyle.