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This article first appeared in The Edge Financial Daily on March 14, 2019

KUALA LUMPUR: PRG Holdings Bhd’s 63%-owned subsidiary Furniweb Holdings Ltd, which is listed on the Hong Kong Stock Exchange, has proposed to acquire Meinaide Holdings Group Ltd for HK$140 million (RM72.88 million) to be fully satisfied via the issuance of shares.

Furniweb believes that the acquisition provides an excellent opportunity for it to expand its business portfolio to include production and sale of polyvinyl chloride (PVC) foam boards, polystyrene foam boards, PVC construction templates and other plastic products, which have high growth potential.

In a filing with Bursa Malaysia, PRG said Furniweb had entered into an agreement with Triumph Star Global Ltd for the proposed acquisition.

Under the deal, Furniweb will issue 56 million new shares to Triumph Star Global at HK$2.50 per share, which represents an 11.03% discount to the closing price of HK$2.81 per share on Tuesday.

The agreement also entails a profit guarantee from Triumph Star Global to Furniweb that the consolidated net profit of Meinaide will not be less than 10 million yuan for the financial year ending Dec 31, 2019.

On completion, Meinaide will become an indirect wholly-owned subsidiary of Furniweb.

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