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10 April 2000
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| Hong Kong - Midland Realty (Holdings)
Ltd. ('Midland Holdings'), a company listed on the Hong Kong
Stock Exchange, has signed an agreement today with Hong Kong
Property Services (Agency) Holdings Ltd. (HKPS), a subsidiary
of Cheung Kong (Holdings) Ltd. (Cheung Kong), to merge their
respective real estate agency operations - Midland and Hong
Kong Property. |
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| The agreement comprises of the
issue of convertible bond of Midland Holdings worth HK$70 million
to HKPS. On full conversion of the convertible bond which has
a conversion price of HK$1.2 per share, HKPS will own about
10% of the equity stake of Midland Holdings making HKPS the
second largest shareholder of Midland Holdings next to Freddie
Wong, Chairman and Managing Director of the company. |
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| The merge of Midland and Hong
Kong Property will result in Midland Holdings having the biggest
market share in real estate agency business in Hong Kong. In
addition, Hong Kong Property will remain separate in terms of
operations and will continue to be headed by its Managing Director,
Mr Michael Choi. |
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| "This merger is an excellent
move for Midland Holdings as it gives us the opportunity to
incorporate the resources and expertise of Hong Kong Property,
which is one of the top, reputable real estate agencies in Hong
Kong. This will further strengthen Midland Holdings's leadership
position in Hong Kong's real estate agency business apart from
its being the only listed company in the field. This is the
first step of Midland Holdings to expand through acquisition.
It has seen its market share improved in the first quarter of
2000. Hong Kong Property will be a vehicle of Midland Holdings
for further merger and acquisition to expand the real estate
agency operation in Hong Kong and overseas. Going forward, we
are confident that Midland Holdings will continue to grow from
strength to strength both organically and through mergers and
acquisitions" said Mr. Freddie Wong, Chairman of Midland Holdings. |
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| "In the past three years, we
have achieved in building Hong Kong Property successfully to
become one of the top five real estate agencies in Hong Kong.
Now that we decide to merge with Midland, a market leader with
27 years of operation history, we believe this combination of
two of Hong Kong's real estate agencies will take Hong Kong's
real estate agency business to new heights" said Mr. Choi. |
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| In a separate move, Cheung Kong
(Holdings) Ltd has agreed to subscribe through a subsidiary
20% shareholdings of Midland Cyber Agency Ltd (Midland Cyber),
the Internet arm of Midland, at a consideration of HK$40 million.
In addition, Midland Cyber offers Cheung Kong (Holdings) Ltd.
an option to subscribe for 5% of equity stake in Midland Cyber
prior to Listing of the company on any recognised Stock Exchange.
Cheung Kong will also nominate a person to be a director of
Midland Cyber. Midland Cyber is engaged in e-commerce and property
transactions via Internet. It is intended that Midland Cyber
will be spun off as an independent listing entity when timing
is appropriate. |
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| "As one of the major
property developers in Hong Kong, Cheung Kong has always been
interested in promoting the development of the overall property
business in Hong Kong. These agreements today lead Cheung Kong
to a position to become the second largest shareholder in Hong
Kong's largest real estate agency in Hong Kong, and on the other
hand, poses an opportunity to participate in a leading property
portal at a pre-IPO stage." said Mr. HL Kam, Chairman of HKPS
and Deputy Managing Director of Cheung Kong. |
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| The above two separate
moves are expected to usher in a closer working relationship
between Midland Holdings and Cheung Kong in the property arena. |
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