Yue Yuen Industrial (Holdings), the world's largest branded athletic and casual footwear manufacturer, is moving to 'vertically integrate' its manufacturing operations by buying stakes in 67 supplier firms from its parent company.
The company yesterday proposed the purchases from its Taiwan-listed parent Pou Chen Corp for US$427 million.
The Hong Kong-listed firm will settle the transaction with a cash component of US$240.2 million.
'[The cash consideration is] to be financed through a combination of existing cash holdings, undrawn bank facilities and external debt,' the company said.
The remaining US$186.8 million would be settled by an issue of 60 million Yue Yuen shares, or 9.26 per cent of the company's existing share capital, at HK$29.29 each.
The issue price represents a 26 per cent premium to the share's closing price of HK$23.7 last Friday, the last trading day before the signing of the acquisition agreement.
The firms in which Yue Yuen proposes to acquire stakes provide raw materials, production tools and components for the manufacturing of athletic and casual shoes.
