You are here
Hot stock: Ocean Sky surges on proposed acquisition of property developer
SHARES of Ocean Sky International jumped 13.3 per cent on Tuesday morning, following an announcement that it had entered into a non-binding memorandum of understanding regarding the proposed acquisition of property developer Link Holdings for S$226.3 million.
Shares of the investment holding company gained 1.8 cents, trading at S$0.153 on Tuesday.
The acquisition will be a reverse takeover, with the consideration sum satisfied through the issue and allotment of some 642.75 million new shares at an indicative issue price of S$0.352 per share. This will represent approximately 74.1 per cent of the enlarged issued share capital of Ocean Sky after the completion of the acquisition, but prior to any compliance placement.
Link Holdings has a track record of over 10 years in property development and has to date completed and sold 30 luxurious landed houses in Singapore. Its completed properties include an industry project in Jalan Bukit Merah as well as residential apartments. In the pipeline is an integrated mixed development project in the Iskandar development region in Malaysia.
Link Holdings also has an investment property portfolio and a number of commercial and industrial properties located in Singapore's prime business district.
The proposed acquisition presents an opportunity for the company to acquire an operating business in the property sector, with a track record and growth potential, Ocean Sky said in a statement on Monday.
It falls in line with the Ocean Sky's diversification strategy to enter into the construction and engineering sectors, as well as property business, to achieve more consistent and sustainable financial growth.
The acquisition of Link Holdings will potentially widen the investor base for its shares, and attract more investor interest and trading, Ocean Sky said.