China Strategic Holdings and Star Telecom International Holdings have proposed a series of transactions to revamp China Strategic's telecommunications business.
Yesterday's move followed China Strategic chairman Oei Hong-leong's exercising of an option to buy a 22.95 per cent stake of Star at $2 per share on July 7, which increased China Strategic's stake in Star to 37.16 per cent to make it the telecom firm's largest shareholder.
China Strategic has manufacturing and energy projects on the mainland, while Star is involved in paging, mobile phone network and Internet services.
China Strategic also owns 37 per cent of telecom equipment trader Tricom Holdings, which is aggressively exploring the mainland's telecoms market.
As part of the reorganisation announced yesterday, China Strategic has conditionally agreed to transfer its 37 per cent interests in Tricom to Star, while Star will buy 85 million shares of Tricom from China Strategic at $2 each for a total of $170 million.
The price represents a premium of 2.56 per cent of Tricom's $1.95 closing price on June 20 - the last trading day for Tricom before its shares were suspended from trading on June 23.
The acquisition is subject to certain pre-emptions by Chambord, another major shareholder of Tricom, which owns 37 per cent of Star.