KUALA LUMPUR (Feb 24): Penang-based property development and real estate investment group Aspen Group is planning a reverse takeover of ceramic and homogeneous tiles maker Yi-Lai Bhd, which will see the latter branching out into property development.

According to a bourse filing today, Yi-Lai said it has entered into a heads of agreement (HoA) with Aspen Vision Group Sdn Bhd and Setia Batu Kawan Sdn Bhd (Setia Batu Kawan), to acquire Aspen Vision All Sdn Bhd for RM550 million.

Under the HoA, to be effective for 90 days from today, the parties involved have agreed to enter into definitive agreement for the sale and purchase of Aspen Vision All, with the purchase consideration still subject to the revalued net asset value (NAV) of Aspen Vision All, and other factors.

According to Yi-Lai, the purchase consideration shall be settled via the issuance of 450 million new Yi-Lai shares at an issue price of RM1, while the remaining RM100 million will be paid in cash, which shall be funded through internally-generated funds and/or bank borrowings.

“The issue price of RM1 represents a premium of 22.3% over the 5-day volume-weighted average market price of Yi Lai shares, including Feb 23," it added.

Aspen Vision All is principally involved in the provision of management services and investment holding, while its subsidiaries are principally involved in property development. It was formed two years ago to undertake the Aspen Vision City and Vervéa development at Batu Kawan, Penang.

Yi-Lai said the proposed acquisition is expected to enable the existing shareholders of Yi-Lai to participate in a new, viable and profitable core business in property development via Aspen Vision.

"The diversification of the core business of Yi-Lai into property development will be a synergistic down-stream fit for Yi-Lai’s existing tile manufacturing business," it said.

The proposed acquisition will result in a significant change in business direction or policy of Yi-Lai and will also result in a reverse take-over of Yi-Lai, it added.

Shares in Yi-Lai closed up 1.5 sen or 1.78% today, at its one-month high of 86 sen, for a market capitalisation of RM129.6 million.