Mainland-based Guangdong Enterprises has agreed to inject an office building in Sheung Wan and a 50 per cent stake in a highway company to its Hong Kong-listed subsidiary Guangdong Investment for $1.31 billion.
The 27-storey Guangdong Mountain Building is located in Sheung Wan. It consists of 183,229 square feet of floor space, and was valued at $1.3 billion at September 6.
The building has been divided into about 173,060 sq ft of office space and just over 10,000 sq ft of retail space. Guangdong Investment, a Hong Kong-listed red chip, said it would use the building as its headquarters and would rename it Guangdong Investment Tower.
The acquisition price for the building is $1.2 billion, representing a 7.7 per cent discount to the valuation.
It will pay $689.28 million in cash, while the remaining $510.72 million will be paid by issuing 96 million new shares priced at $5.32 each.
The issue price marked a 2.385 per cent discount to the average closing prices of $5.45 per share for the five trading days preceding the signing of the agreement on September 7.
