CapitaLand deal buoys Lai Sun firms

PUBLISHED : Friday, 10 March, 2006, 12:00am
UPDATED : Friday, 10 March, 2006, 12:00am

Shares of Lai Sun's group of companies gained as much as 14 per cent yesterday on rumours that CapitaLand might buy a stake in the group's mainland development arm.

The Singapore-listed developer was in talks with Lai Sun Group's mainland unit Lai Fung Holdings for a second property project in China and the deal could result in issuing new shares, market sources said.

Lai Fung might issue up to 20 per cent of its new shares to CapitaLand through a share placement, market rumours suggested yesterday. Based on its 5.87 billion outstanding shares, the deal could be worth up to $570 million at yesterday's close.

Riding on the rumours, shares in Lai Fung yesterday rallied 12.79 per cent in just 14 minutes after the market opened to 48.5 cents. The firm then requested a trading suspension, 'pending the issue of an announcement involving the issue of new shares of the company'.

Investors also flocked to snap up shares of the remaining four members of the Lai Sun Group.

Among them, media and satellite television arm eSun Holdings was the top gainer, jumping 14.81 per cent to $4.65.

This was followed by parent Lai Sun Garment (International), whose shares were up 12.16 per cent to 83 cents.

Local property arm Lai Sun Development added 10.91 per cent to 30.5 cents while Crocodile Garments rose 5.08 per cent to finish at 62 cents.

A CapitaLand spokesman yesterday said he 'knows nothing of the rumours', while Lai Sun Group's management was not available for comment.

Lai Fung, 45 per cent owned by Lai Sun Garment, develops properties in the mainland, with a primary focus on Shanghai and Guangzhou. Its mainland land bank comprises about seven million square feet in the two cities, sufficient to support the group's development plans over the next three to four years.

To beef up its exposure in the Pearl River delta, CapitaLand teamed up with Lai Fung in November last year in a $1.38 billion joint venture to develop a 3,000-unit residential project in Bai Yun district in Guangzhou.