Lippo Group agrees to sell HK subsidiary for $109m

Lippo Group agrees to sell HK subsidiary for $109m

JAKARTA (JP): The Lippo Group, a Jakarta-based diversified
financial and property conglomerate, has agreed to sell 50.1
percent of its Hong Kong-based subsidiary Asia Securities
International Ltd. to Dan Form International Ltd. of Hong Kong
through a US$109.08 million (HK$843.2 million) transaction.

Dan Form International, which is controlled by businessman Dai
Xioming, acquired the listed property and securities firm through
another company called Fabulous Investments, which is due to buy
290.76 million shares of Asia Securities at HK$2.90 (US$2.66)
each. Dan Form has already paid a deposit of US$1.5 million.

The offer price of HK$2.90 indicated a 6.2 percent premium
over the closing price of Asia Securities on Thursday last week,
valuing the sold company for $1.68 million.

The Riyadi family, the proprietor of Lippo, is reported to
have disposed of the shares for a profit of HK$155 million.

Although talks about the acquisition have spread throughout
Jakarta's business circles this week, it was only yesterday that
Lippo confirmed the report to the Indonesian press.

"Yes, the transaction took place on Monday," Polly Ling, Lippo
Group's public relations officer in Hong Kong, confirmed to The
Jakarta Post by phone yesterday.

Analysts have said that the transaction marked an end to an
almost two year struggle for control of Asia Securities between
Lippo and the Hong Kong-based Chinachem group, which is
controlled by businesswoman Nina Wang.

Struggle

News reports have stated that the struggle began in 1983 when
Lippo, in control of Asia Securities through a company called
Hong Kong China, held a stake of just under 35 percent of Asia
Securities and sought to increase its stake by offering
shareholders HK$1.54 a share.

Chinachem, which at that point controlled 25 percent of Asia
Securities, subsequently made a counteroffer of HK$1.98 per
share. Wang's offer, however, was unsuccessful when three large
blocks of shares were sold to Hong Kong China at HK$1.91 a share.

Polly Ling declined to comment on the supposed Lippo-Chinachem
feud. Members of the Riyadi family and officials of Chinachem
were also unavailable for comment.

Asia Securities, meanwhile, said that its net interim profit
dropped 31 percent in the six months ended June 30, due to a
reduced profit from property sales.

The firm also said that its after-tax profit tumbled to HK$35
million from HK$50.7 million last year. The drop came despite a
36 percent rise in revenues to HK$255.1 million from HK$18.75
million.

Asia Securities closed at HK$2.70 yesterday on the Hong Kong
stock market.

The Asian Wall Street Journal reported that the majority of
Dan Form's acquisition of Asia Securities was financed by the
Beijing-based Bank of China. It is also mentioned that Dan Form
International is to continue with the existing business of Asia
Securities. (hdj)