HLFG proposes to buy Menara Raja Laut (formerly known as Menara EON Bank) for RM220m

KUALA LUMPUR (Apr 6): Hong Leong Financial Group Bhd (HLFG) has proposed to acquire Hong Leong Bank Bhd (HLB)  Menara Raja Laut (formerly known as Menara EON Bank) and the parcel of land it sits on for a cash consideration of RM220 million.

HLFG’s  indirect 70%-owned subsidiary Hong Leong Assurance Bhd (HLA) today entered into a sale and purchase agreement with HLB for the proposed acquisition, the banking and financial group told Bursa Malaysia in a statement.

It said the RM220 milllion price tag for the office building located at Jalan Raja Laut, Kuala Lumpur, will be fully funded from HLA shareholders’ funds.

According to HLFG, it has obtained approval from Bank Negara Malaysia for the proposed acquisition and it is now pending shareholder approval.

The proposed acquisition is expected to be completed by the first half of this year, barring any unforeseen circumstances, it said.

Currently, 41% of the office building is occupied by tenants, of which 36% comprised HLB and its subsidiaries. Part of the land is leased to Tenaga Nasional Bhd.

Upon completion of the proposed acquisition, HLB is expected to lease its occupied office space from HLA with a rental payment of about RM5.14 million per annum, said HLFG.

HLFG said the proposed acquisition is in line with HLA’s “strategic asset allocation” as it may provide long-term yield and/or capital appreciation potential.

The group added it may consider proposals to refurbish and redevelop the building including collaborations with a property developer to do so.

HLFG ended 10 sen or 0.6% lower to RM16.90, translating to a market capitalisation of RM17.9 billion.

source by:http://www.theedgemarkets.com/my/article/hlfg-proposes-buy-menara-raja-laut-rm220m