The Straits Trading Company’s wholly-owned subsidiary STC Capital has entered into a share sale and purchase agreement with JL Equity II, a unit of the JL Family Office (JLFO) for the proposed acquisition of JLFO’s 10.5% stake in Straits Real Estate for an aggregate consideration of $105 million in cash.
In a joint media release dated April 5, the parties state that JLFO “seeks to divest its stake in Straits Real Estate at the end of its successful investment cycle”. Post-transaction, Straits Real Estate will become a fully owned subsidiary of Straits Trading. The completion of the transaction is scheduled for April 9 and it will be fully funded by the group’s internal cash resources.
The proposed acquisition will enable Straits Trading to deliver enhanced long-term growth and capital returns to its shareholders. On a pro forma basis for FY2020, it is also earnings per share (“EPS”)- accretive for the Group.
SEE:Straits Trading: From tin mining and smelting to property investing and beyond
Chew Gek Khim, executive chairman of Straits Trading, says that the acquisition represents a material investment in one of Straits Trading’s key business units, providing shareholders with enhanced long-term growth prospects and capital returns.
“We value the deep and long-standing relationship with JLFO and will continue to pursue opportunities with them in the future,” she says.
Andy Lim, group CEO of JLFO says, “We have enjoyed our working relationship with Straits Trading immensely and look forward to continuing our collaboration on future projects through our real estate unit, The Land Managers.”
Shares in Straits Trading closed 1 cent or 0.35% up at $2.85 on April 5.
