KUALA LUMPUR (Nov 13): Magma Group Bhd (KL:MAGMA) has scrapped its plan to acquire the LUMA Hotel in Kota Kinabalu for RM60.9 million in a cash-and-shares deal.
The company said its unit, Magma Avenue Sdn Bhd, and the vendors have decided not to proceed with the heads of agreement inked for the deal involving the hotel business and four contiguous buildings following further discussion.
“The parties had therefore agreed to mutually terminate the HOA,” Magma said in a bourse filing on Friday, without disclosing the reason for the decision.
The HOA was inked in March this year. Magma entered the deal as part of its strategy to expand and enhance its hotel portfolio.
Under the now-terminated agreement, Magma was to acquire 100% equity in HH Home Hotel Sdn Bhd, which owns the LUMA Hotel and its brand, for RM12.8 million via a combination of cash and the issuance of 27.15 million new shares.
It also proposed to acquire two buildings — one from HKT Realty Sdn Bhd and another from Gamwon Properties Sdn Bhd — for RM16 million each, to be settled via a combination of cash and 14.55 million Magma shares per building.
The other two buildings were to be acquired via the purchase of Zenith Everise Sdn Bhd from Wong Siew Ong and Aaron Chin Chen Nyap for RM7.6 million, via cash and 16.36 million shares, and the purchase of Upper Domain Sdn Bhd from Wong and Lee Ka Yi for RM8.5 million, via cash and 19.09 million shares.
The shares were to be issued at 33 apiece, taking into account the five-day volume-weighted average price of Magma shares up to March 4.
Shares of Magma ended unchanged at 25.5 sen on Friday, valuing the company at RM492.17 million.