Chongqing Department Store to buy RMB 3.95-bln asset

Oct. 12, 2009 (China Knowledge) - Chongqing Department Store Co Ltd<600729> yesterday announced that it plans to acquire Hangzhou New Century Information Technology Co<002280>, which is valued at RMB 3.95 billion, by issuing 179.3 million shares at an average price of RMB 22.03 apiece, sources reported.

The Shanghai-listed enterprise intends to issue 109.37 million shares to Chongqing General Trading (Group) Co Ltd, bringing the latter firm's shareholding from the previous 32.5% to 45.83%, or 175.65 million shares. Chongqing Department Store will also issue 69.93 million shares to New Horizon LakeView Investment Ltd, which will then hold 69.93 million shares, or 18.24% of the Shanghai-listed firm.

Chongqing General Trading currently has a 61% stake in the Shenzhen-listed firm, while New Horizon LakeView Investment has a 39% stake.

After the purchase, Chongqing Department Store will have 83.59% more stores, 117.27% more supermarkets and 49.79% more electrical equipment shops. In addition, the firm's operating revenue is expected to swell 147.8% and its net profit is expected to increase 153.6%.

As of the end of last year, Hangzhou New Century Information Technology's book value was RMB 917 million, reflecting a value-added ratio of 331%. In 2008, the company reaped RMB 240 million in net profit and realized RMB 9.6 billion in sales revenue.