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MEMBRANE manufacturer Memstar Technology is proposing to acquire the entire issued and paid-up share capital of Longmen Group for US$420 million (S$546 million), via the issuance and allotment of new shares.
If the deal gets through, it will constitute a reverse takeover (RTO) - Longmen will own 73.1 per cent of Memstar, marking a backdoor listing for the developer of unconventional natural gas.
Longmen is principally engaged in the exploration, development, production and sale of coal bed methane resources in the Ordos Basin in Shaanxi, China.
The new shares in Memstar will be issued at 1.615 Singapore cents apiece, representing a premium of approximately 7.24 per cent to the volume weighted average price of the shares on Nov 28 - the last market day preceding the date of the share sale and purchase agreement.
United Envirotech acquired Memstar in April for S$293 million in cash and shares, in a move to become a fully vertically integrated water-treatment outfit.