First Steamship Co Ltd (益航) yesterday said it is considering an offer to buy its 19 percent stake in casino operator Summit Ascent Holdings Ltd (凱升控股) for at least HK$429 million (US$54.7 million).
Hong Kong-listed Summit Ascent said that on Tuesday last week it received a full takeover bid from a third-party investor.
The buyer offered to acquire all Summit Ascent shares for HK$1.5 each, First Steamship spokesman Lee Shih-ming (黎世明) told a media briefing yesterday.
“We have not come to a final decision yet,” Lee said. “The offer is [good] enough for us to consider the bid.”
The sale would contribute income of HK$123 million, which would help boost First Steamship’s earnings of NT$0.77 per share, Lee said.
First Steamship purchased the 286 million shares at an average price of HK$1.04 per share, lower than the offer price, he said.
Its board of directors yesterday approved a proposal to appoint First Steamship chairman Jerry Kuo (郭人豪), who is also non-executive director of Summit Ascent, to represent the company in talks with the potential buyer.
Summit Ascent operates a casino and hotel in the “Tigre de Cristal” resort in Vladivostok, Russia.
To improve its return on investment, First Steamship would consider selling the shares, as the casino operator turned profitable last year after struggling for years, Lee said.
It is foreseeable that Summit Ascent would not distribute a cash dividend, as the Hong Kong-listed company plans to invest significantly in the second-phase construction of a new casino and hotel, he said.
First Steamship generates 80 percent of its revenue from Grand Ocean Retail Group Ltd (大洋百貨). The group operates 17 department stores in second-tier and third-tier cities in China.
Shipping business contributes 14 percent of its revenue, the company said. First Steamship operates a fleet of nine container ships.
First Steamship reported NT$64 million (US$2.07 million) in net profit for last year, down from NT$565 million in 2017. Earnings per share tumbled to NT$0.01 from NT$1.06.
Revenue rose 10 percent to NT$8.04 billion last year from NT$7.3 billion in the previous year.
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