Lai Sun Development (LSD) has granted a wholly owned arm of Bank of China (BOC) an option to subscribe for up to 230 million shares in its mainland arm Lai Fung Holdings for about $149.5 million.
The share-sale option was described by analysts as a strategic move, aimed at building up a relationship with the mainland's biggest foreign-exchange bank.
Tai Fook Securities analyst Eddie Tam Ho-kuen said the alliance could help Lai Fung's financing and business development in the mainland, but added the actual financial benefit to the debt-laden LSD would be minimal.
The deal appeared to win the support of investors as shares in Lai Sun and Lai Fung rose when they resumed trading yesterday after being suspended on April 8.
LSD rose 8.3 per cent to 65 cents, compared with last Wednesday's 60 cents close.
Lai Fung rose 11.11 per cent to 50 cents, up from 45 cents before the suspension.
On Monday, LSD said it would grant an option to BOC's Sun Chung Estate to subscribe for 230 million existing LSD-held shares - or 22.02 per cent - in Lai Fung at 65 cents each.