Mercurius gives more details of Malaysia grocery acquisition in reply to SGX queries

MERCURIUS Capital Investment has given further details of its proposed acquisition of a grocery group in Malaysia, including why shareholder approval is not required, in response to Singapore Exchange (SGX) queries.

In a filing on Thursday night, Mercurius said that it is already seeking shareholders' approval for the diversification into the new business of grocery trading and retailing.

This new business will essentially comprise the businesses of the target group, details of which will be provided in the circular to shareholders, said Mercurius.

"Shareholders are fully aware of this and of the fact that by considering and voting on the new business, they are considering and indirectly voting on the proposed acquisition," it said.

Furthermore, as the target group is profitable, there is no prejudice to shareholders in not seeking specific approval for the proposed acquisition, it added.

SGX had also asked for details such as the market valuation of properties owned by the target group. Mercurius said there was no independent market valuation report, but noted that an independent valuation was commissioned by a bank which is refinancing the target group's existing loans. Mercurius will request a copy of this as part of its due diligence.

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Mercurius also provided requested details such as the shareholders and directors of the special purpose vehicle (SPV) shareholders; the identities of the vendors; and how long each of the target grocery stores have been in operation. The latter ranged from almost four years to 22 years.

Asked if the company would request audited financial statements of the target group, Mercurius said it has obtained them but "may not present such information in the circular as we are not acquiring the shares of the targets but their business operations and assets and accordingly, the financial information of each target is not as meaningful as compared to the pro forma combined financial statements of the SPV".