Cityneon faces possible cash offer as majority shareholder gets acquired

MAINBOARD-LISTED events and exhibitions firm Cityneon Holdings may face a possible cash offer as a Hong Kong company acquires its majority shareholder Lucrum 1 Investment Limited, which holds a nearly 70 per cent stake in Cityneon.

If the acquisition materialises, the Hong Kong firm Mutual Power - an indirect wholly owned subsidiary of Hong Kong-listed Teamway International Group Holdings - will be required by Singapore law to make a mandatory unconditional cash offer to acquire all the issued and paid up ordinary shares in Cityneon.

Mutual Power had on Monday signed a memorandum of understanding (MOU) to acquire a 76 per cent stake in Lucrum 1 from Massive Right Investment Limited. It will also acquire all shareholders' loans that Lucrum 1 owes to Massive Right.

If the acquisition materialises, Mutual Power and Teamway will together hold 84.5 per cent of Lucrum 1 and acquire statutory control of the firm. This triggers the chain offer principle in the Singapore code on takeover and mergers.

Mutual's acquisition of Lucrum 1 is, however, subject to the usual precedent conditions such as obtaining the necessary approvals.

The Teamway board emphasised that the MOU is non-legally binding, and that no legally binding agreement for the proposed acquisition of Lucrum 1 has been entered into as at Tuesday.

Lucrum 1 currently holds a 68.95 per cent stake in Cityneon, after making a mandatory unconditional cash offer for its ordinary shares in July.

Its shareholders were, as at mid-May, Massive Right Investments Limited (76 per cent); Philadelphia Investments Ltd (15.5 per cent), a special purpose vehicle held solely by Cityneon executive chairman and chief executive Ron Tan Aik Ti; and Mutual Power (8.5 per cent).

Shares in Cityneon traded at S$1.155 as at 12.45pm on Tuesday, down 0.5 cent from its previous close.