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KUALA LUMPUR (March 6): Magma Group Bhd (KL:MAGMA) said on Thursday it plans to acquire the LUMA Hotel in Kota Kinabalu for RM60.9 million in a cash-and-shares deal, to expand its hotel portfolio.
In a filing with Bursa Malaysia, the group said its wholly-owned subsidiary, Magma Avenue Sdn Bhd, has entered into a heads of agreement to acquire the LUMA Hotel business and four contiguous buildings in the Sabah capital.
Under the agreement, Magma will acquire 100% equity in HH Home Hotel Sdn Bhd, which owns the LUMA Hotel and its brand, for RM12.8 million via a combination of cash and the issuance of 27.15 million new shares.
The group will also acquire four buildings from four different vendors where the LUMA Hotel currently operates. This includes two buildings—one from HKT Realty and another from Gamwon Properties—for RM16 million each, to be settled via a combination of cash and 14.55 million Magma shares per building.
The remaining two buildings will be acquired through the purchase of 100% equity in Zenith Everise Sdn Bhd from Alan Wong and Chin Chen Nyap for RM7.6 million, via cash and 16.36 million shares, and Upper Domain Sdn Bhd from Alan Wong and Lee Ka Yi for RM8.5 million, via cash and 19.09 million shares.
All shares will be issued at 33 sen apiece, taking into account the five-day volume-weighted average price of Magma shares up to March 4.
Magma said the proposed acquisitions align with the group’s strategy to expand and enhance its hotel portfolio. By investing in hospitality assets with strong growth potential, Magma also aims to strengthen recurring income from its core hotel business.
Magma currently manages the Impiana-branded hotels, develops properties and operates the Chagee tea chain in Malaysia.
At Thursday’s close, Magma shares fell one sen or 3.1% to 31.5 sen, valuing the company at RM541.9 million.
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