PFTFF PERFECT TREASURES HLDG LTD OTC BB foreign - pink sheets
Tobacco tycoon in Asian Internet foray
By a staff reporter
STORY: CHARLES Ho Tsu-kwok, tobacco magnate and honorary chairman of Sing Tao Holdings, publisher of this newspaper, is buying a Hong Kong-listed company to use as an Internet flagship in a transaction valued at about $1 billion.
Mr Ho is subscribing for new shares and new convertible preference shares in Perfect Treasure Holdings, which distributes brand name photographic products and consumer electronic products and has diversified into making telephone systems and application software in China.
Mr Ho plans to enter the Asian Internet market, using Hong Kong as the base for Perfect Treasure.
``It will be listed in Hong Kong but it will make investments in information technology (IT) and the Internet in Asia,' a company spokeswoman told Business Standard last night.
Mr Ho is making the investment through a private company, Luckman Trading.
Under the terms of the transaction, Mr Ho is subscribing for 607.4 million new shares in Perfect Treasure, representing about 54.9 per cent of Perfect Treasure's enlarged capital. He is also subscribing for 976.6 million partly paid convertible preference shares.
If all the convertible preference shares are converted (assuming all outstanding warrants and options are also converted), Luckman would own about 71.99 per cent of Perfect Treasure.
He is paying 63.88 cents per share for the stake, an 80 per cent discount to the $3.20 last quoted price of Perfect Treasure shares on March 23.
The spokeswoman said the subscription price was based on Perfect Treasure's net asset value of $1.02 per share on a fully diluted basis.
She also said that Perfect Treasure's shares had spiked after it announced that it was in talks with a third party investor which might result in a change of control.
Perfect Treasure's shares hit a high of $4.50 on January 13, and have gained 123.8 per cent this month, and 70.2 per cent since the end of 1999.
She said Mr Ho is seeking a whitewash waiver from the Stock Exchange of Hong Kong so that he would not have to make a general offer to shareholders, despite breaching a 35 per cent threshold.
The Perfect Treasure deal is the latest in a series of backdoor listings for technology companies or investment vehicles in Hong Kong.
Earlier this week, Guoco Land and Fung Cheung Kee joined the high-tech stocks club, which includes companies like Cheung Wah Development and Golden Power.
KG NextVision Corp, which belongs to the Koo family of Taiwan, on Monday confirmed it was subscribing for shares in Fung Cheung Kee, a contracting business.
KG NextVision plans to make Fung Cheung Kee its listed flagship in Hong Kong to develop Internet businesses in Asia, and will re-christen it KG NextVision to reflect its planned diversification. The spokeswoman for Mr Ho said Perfect Treasure will also be re-christened to better reflect its new focus.
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