Yoma Strategic is up 13.4% at S$0.64 in strong volume accounting for around 6% of shares traded on the SGX after the Myanmar real-estate company said it will acquire an 80% stake in a Yangon site for a mixed-use project for US$81.28 million ($99.5 million).
“We believe this to be a reasonable price in the lower half of our range of estimates,” OCBC says in a note. OCBC expects the development to be “iconic,” converting the former Railway Headquarters to a luxury hotel and including a condominium, a four-star hotel and serviced-apartment complex, two Grade-A office towers and a retail mall.
Yoma plans a one-for-four rights issue of up to 241.1 million new shares at a 25%-35% discount, likely in 1Q13, to fund the acquisition; it also plans a private placement of 192.85 million new shares at $0.525/share to raise $101 million.
OCBC notes the placement shares can participate in the rights issue, to further finance the project. After accounting for the acquisition’s accretion and the capital-raising’s potential dilution, OCBC raises its fair value to $0.52 from $0.51, keeping a Hold call.
An October OCBC report said it remained positive on Yoma’s long-term outlook, but its shares were fairly priced. Orderbook quotes suggest Yoma, up more than 259% year-to-date, may struggle to top its $0.64 intraday and all-time high.
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