[HONG KONG] Chinese home appliance retailer GOME Electrical Appliances Holding Ltd said it would buy retail assets from its controlling shareholder for HK$11.27 billion (US$1.45 billion), expanding its network of company-owned stores.
The listed company will buy the retail assets from GOME Management Ltd, which is owned by controling shareholder Wong Kwong Yu, in a deal to be settled by the issue of 6.2 billion new shares and warrants which are exercisable within two years into 2.5 billion new shares.
Mr Wong's stake in GOME will be increased to 55.34 per cent on completion of the deal and exercise of all the warrants, from the current 32.43 per cent, the company said in a filing to the Hong Kong bourse late on Sunday.
Under the deal, GOME will acquire a network of 578 stores across 181 Chinese cities, which it currently already operates but does not own. The purchase will increase the number of retail stores its owns to 1,714.
The assets also include the retail sale of electrical appliances and consumer electronic products under the trademark"GOME Electrical Appliances" and related operations in cities other than those in which the company already operates.