Cityneon to buy exhibition producer Victory Hill, plans 1-for-1 rights issue

CITYNEON Holdings said on Thursday that it will be acquiring exhibition producer, Victory Hill Exhibitions Pte Ltd - known for its travelling interactive exhibition, Marvel's The AVENGERS S.T.A.T.I.O.N (Scientific Training and Tactical Intelligence Operative Network) - from Philadelphia Investments Ltd.

The purchase price for all 100,000 shares will consist of S$10 million in cash, and the issuance of 45 million new Cityneon shares at S$0.20 per share, upon completion of the purchase. A deferred payment of S$2 million and a variable incentive payment will be payable upon Victory Hill achieving certain profit targets by June 30, 2016.

Cityneon is proposing a one-for-one non-underwritten renounceable rights issue of 88.53 million new shares at an exercise price of S$0.18 per share to partially fund the purchase. This will raise up to S$15.1 million in net proceeds if all rights are fully subscribed. The exercise price represents a 30.8 per cent discount to Cityneon's share price of S$0.26 as at the close of trading on April 1, 2015.

Ernst & Young Solutions LLP had on Jan 15, 2015, given an indicative fair market value of Victory Hill within the range of US$15.4 million to US$18.4 million.

"Both our brands share good synergies, and by injecting Victory Hill's specialty expertise in travelling exhibitions, as well its extensive relationship which it has built with global brands such as Marvel, we can now join hands to hone our capabilities in our core businesses,'' Lew Weng Ho, non-executive chairman of Cityneon said.

Victory Hill Exhibitions, LLC, inked a licence agreement with Marvel Characters BV on Jan 31, 2013, for the right to provide exhibition services for Marvel.

Marvel's The AVENGERS S.T.A.T.I.O.N is slated to run until May 24, 2015. Talks are underway to secure an extension to the licence agreement and for an option to extend the exhibition until December 2015 or January 2016.

Victory Hill, which was incorporated in Singapore on Dec 12, 2014, as a private limited company, plans to bring the production of Marvel's The AVENGERS S.T.A.T.I.O.N into major science museums across the world.

"Besides New York where the exhibition is currently held, we have also started talks with other potential partners in other cities in Asia and in the US," said Ron Tan, chief executive officer of Victory Hill.