Franshion Properties (00817-HK) Bought JinMao Group for 12.4 Billion HK Dollars

From: Finet Hong Kong News Center

Franshion Properties declared to acquire all equity income of JinMao Group from Sinochem Corporation and other persons for a total of RMB 11 billion (about 12.38 billion HK dollars), in which about RMB 7.402 billion will be paid by issuing 2.159 billion shares at the price of RMB 3.43. The issuing price is 3.7% lower than the closing price on June 5 (RMB 3.56). The issuing shares account for about 30.5% of the share capital issued after expansion. JinMao Group is engaged in the development, holding and operation of high-end property, with the registered office in Shanghai Pudong New Zone. The group holds the equity of JinMao Tower, JinMao Hilton Sanya Hotel, JinMao JW Marriott Hotel Shenzhen, JinMao Ritz-Carlton Hotel Sanya and JinMao Westin Beijing project; the group owns 2,488 hotel rooms ( 1,922 in 2006).

The total purchase cost is at a discount of about 35.5% for JinMao s property equity estimation at the end of March 2008, and at a discount of about 16.4% for JinMao s adjusted net asset value.

According to the company planning, the purchase will notably improve the assets scale and quality of its office building and hotel portfolio, strengthen the occupancy and leading position in other major cities and expand its market into new cities and zones after the market share is extended.

Meanwhile, the company s leading position in real estate businesses of Sinochem Corporation will be further strengthened. This can help the company to reduce the internal competition in Sinochem and to get more concentrated support from Sionchem.