Sportswear distributor Fortei Holdings' shares have risen 9 per cent on resumption of trade after a conditional agreement by unlisted Century Legend to buy United Power Investment's (UPI) 51 per cent stake.
The deal, which will trigger a general offer, follows failed negotiations with other potential investors including Pearl Oriental Holdings.
Century, 90 per cent-owned by two investors with interests in restaurant, jewellery and fishery businesses, will pay $34.69 million for the shares at 17 cents each, a 35.4 per cent discount to Fortei's audited net asset value at the end of last year.
About $15 million of the proceeds will be used by Tasmanian Treasure - 45 per cent held by UPI - to pay off a loan to China Sky Finance.
The remainder will be used by UPI, a recession-hit restaurant operator, to reduce debt and boost working capital.
China Sky is wholly owned by another Century shareholder, Samuel Tsang Chiu-mo, who holds 5 per cent of Century.
Mr Tsang will become a director of Fortei on completion of the deal.
The acquisition will trigger a $68 million general offer to remaining shareholders at 17 cents each, of which $36 million will be financed by a loan from China Sky, secured by Century shares.
Century said it planned to maintain Fortei's principal business after the acquisition and had no definite plan to inject assets into the group.
The deal will be subject to approval by regulators and shareholders and a review of Fortei's financial state.
DEALS
ncG1vNJzZmivp6x7tK%2FMqWWcp51krrPAyJyjnmdibn9xfJdonaiqpJq2br7IrJysZZOau7XB0bJkpZ2XmrulecCgqZ6do2KvtsXOrqs%3D