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Peggy Sito

Upmarket retailer Joyce Boutique Holdings has agreed to be taken over by an investment firm which focuses on Asian e-commerce business.

 Strategic Capital Group (SCG), a company led by a 32-year-old American investment banker Eric Solberg, will subscribe to 623.1 million new Joyce shares at 20 HK cents each to give a controlling 39.7 per cent stake of the enlarged company.

 Independent investor Elliott Yuen Wai-kuen, intends to buy 167.1 million new shares at 20 HK cents to take a 10.7 per cent stake of the enlarged company.

 The proposed deal would end chairman Walter Ma King-wah and his wife Joyce Elena Ma's control over the retailer, which has reported losses since 1998 due to the Asian financial crisis.

 Joyce Boutique was suspended from trading on March 17 and will resume trading today.

 As part of the deal, SCG will subscribe to a further 391.4 million new shares in Joyce Boutique at 20 HK cents within 12 months of the completion of the first subscription.

 SCG also has an option to buy a third batch of 205.6 million new shares at 24.5 HK cents within 18 months of the first subscription.

  After the two subscriptions and the exercise of the options, SCG will hold a 56.3 per cent stake in Joyce Boutique, while Mr Yuen's holding will be diluted to 7.7 per cent.

 The Ma family, through a trust named JW Mark, holds 47.2 per cent of Joyce Boutique.

 But their holdings will be cut to 17 per cent following the share placements and the exercise of the option.

 Following the change in controlling shareholders, Joyce Boutique said it would expand into e-commerce and Internet-related operations.

 Joyce planned to develop a Web site to sell fashion items, with delivery support to consumers throughout Asia, the company said.

 Mr Solberg the former head of investment banking for Peregrine Capital in India, has made SCG an active player in the development and funding of Asian e-commerce businesses.

 Joyce Boutique said Mr Ma would remain chairman, his wife would be appointed president and Adrienne Marie Ma would remain managing director.

 The company said it would use the net proceeds of HK$236.4 million from the two share subscriptions to build a substantial on-line presence and e-commerce distribution channel.

 It will further develop its Ad Hoc division which offers casual wear to younger buyers.

 The deal is subject to a number of conditions, including the granting of a whitewash waiver absolving the need from making a general offer.



Investment firm takes Joyce control