Regent Pacific presses hostile bid for Pioneer

Fund manager Regent Pacific Group is urging Pioneer Industries International (Holdings) shareholders to accept its general offer for Pioneer shares it does not own as uncertainty looms over Pioneer's assets in Bangkok.

Regent proceeded yesterday with the hostile takeover bid for property and investment holding company Pioneer after securing unanimous approval from Regent's shareholders at an extraordinary meeting.

Regent executive director Peter Everington yesterday said the future of Pioneer's primary asset - a 3.77 per cent stake in cash-strapped Bangkok Bank - was clouded by a recapitalisation plan.

'The bank is launching a private placement to foreign investors for US$1 billion to keep it afloat. But the fund-raising exercise will dilute Pioneer's stake 40 per cent,' he said.

Pioneer's interest in Bangkok Bank is worth HK$600 million, almost the same as Pioneer's market capitalisation yesterday.

Pioneer would have to plough in $300 million should it seek to maintain its Bangkok Bank shareholding, Mr Everington said.

Pioneer deputy managing director Kenneth Gaw said the company had yet to decide if it would take part in recapitalising the troubled bank.

Regent first proposed Pioneer sell the Bangkok Bank stake two years ago, but to no avail. Since then, the value of the stake has plunged more than 60 per cent.

Regent vowed to sell the stake if its takeover succeeded.

Mr Everington said Pioneer's United States property investment was also hazy.

'The recently purchased building in New York, which was funded by a rights issue last October, has generated substantial returns in the past few months,' Mr Gaw said.

He said details of Pioneer's assets and shareholding structure would be released in a circular drafted to reject Regent's offer.

Regent holds 21.3 per cent of Pioneer, the Gaw family 17 per cent and a company called Forward Investments a further 11 per cent, Mr Everington said.

Regent was offering to buy the 78.7 per cent balance of Pioneer at $1.75 a share, a combination of 25 cents in cash and a three-year $1.50 loan note.