Shares of civil engineering group China Rich Holdings and property company Yoshiya International rose sharply after the former proposed taking over Yoshiya through an injection of assets at a substantial premium.
In an announcement, China Rich said it agreed to inject various recreational and health-care operations for the elderly into Yoshiya for HK$646.8 million.
This represented a 404 per cent premium to net asset value of HK$128.2 million, July 31.
China Rich shares yesterday rose 11.89 per cent to close at 16 HK cents and Yoshiya was up 22.06 per cent to close at 41.5 HK cents.
The companies said the deal was arrived at 'after arm's length negotiations', with 'reference to a limited assessment of the potential value' of HK$735 million.
The assessment was prepared by independent professional valuer Chesterton Petty at the end of October, it added.
The operations made a net loss of HK$2.13 million for the year to July 31, compared with a loss of HK$1.84 million a year earlier.
