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Man Sang to Merge With China Metro-Rural Ltd.

Feb 19, 2010 12:00 PM   By Jeff Miller
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RAPAPORT... Man Sang International, formerly known as Man Sang Holdings, and its subsidiary Creative Gains Limited entered into a definitive merger agreement with China Metro-Rural Limited to combine the two companies in an all-stock transaction. Man Sang is principally engaged in the purchasing, processing, assembling, merchandising and wholesale distribution of pearls and jewelry, but it also owns and operates commercial real estate in Hong Kong and the People's Republic of China (PRC). This deal will expand the group's real estate portfolio.

The transaction is expected to be completed by March 31, 2010 and was unanimously approved by the independent members of the board of directors for both companies. China Metro will broaden Man Sang's commercial and real estate ventures to include properties in New District, Tieling and Liaoning province in the PRC, where China Metro is developing an agricultural logistics project known as China Northeast Logistics City. The project will eventually facilitate exhibition, trading, logistics, warehousing and commercial and residential housing in Tieling.

Cheng Chung Hing, Ricky, the president and chairman of Man Sang's board, said that the combination of Man Sang's subsidiary and China Metro will further enhance the company's real estate portfolio and enhance its opportunity to become an integral part of development in Tieling.

"We believe that China Metro has identified a key niche market and that China Northeast Logistics City is an excellent opportunity to actively expand Man Sang's overall business in growing Northeast China, while simultaneously popularizing to a worldwide market," he said.

Under the terms of the merger agreement, China Metro shareholders will receive approximately 574,432 ordinary shares of Man Sang (MSBVI) for each ordinary share of China Metro that they own. MSBVI will issue up to 57,443,238 ordinary shares at $5 per share — representing a premium of approximately 150 percent of the company's closing share price on February 18, 2010 — to the China Metro shareholders in order to acquire China Metro. This represents a total consideration of approximately $287 million. MSBVI shareholders will retain their shares. 

When the transaction is completed, China Metro shareholders will own approximately 90 percent of the ordinary shares of MSBVI, while MSBVI shareholders will own approximately 10 percent of the ordinary shares of MSBVI.

Man Sang will maintain its corporate headquarters in Hong Kong and its offices and subsidiary operations on the mainland. China Metro will operate as a wholly owned subsidiary of MSBVI and maintain its offices in Hong Kong, as well as its subsidiary operations on the mainland.


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Tags: China, Hong Kong, Jeff Miller, Jewelry
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