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Out-of-home advertising agency VGI Plc (VGI) announced Thursday it will take over media operator Nation International Edutainment Plc (NINE) to operate retail spaces on the BTS Skytrain stations.
VGI announced that its board approved the move to acquire newly issued ordinary shares and to make a tender offer for all shares in NINE via its wholly-owned subsidiary Point of View (POV) Media Group, accounting for around 5.3 billion baht of both transactions.
The company expects the tender offer will be completed by the third quarter this year.
The board also permitted VGI to enter into a 7.5-year leasing contract with NINE to run retail spaces at 31 BTS Skytrain stations. The transaction is scheduled to be completed by the second quarter of this year and has a transaction value of roughly 2.7 billion baht.
Beside acquisition, VGI will sell all shares it holds in Group Work, a company that operates retail spaces at some BTS stations to NINE for around 22 million baht.
The news prompted shares in NINE to surge to the ceiling price of 5 baht during the morning session, up 29.53 percent from its previous close. VGI, however, traded at 5.50 baht, down 2.6 per cent.
VGI said it will use sources of funds from the company’s cash flow and those from capital raising plans of 12.9 billion baht approved in January.
“Merchandising spaces on the BTS Skytrain stations … are the spaces with potential growth,” VGI said in the statement, citing recovery in public transport users from the Covid-19 impact.
According to VGI latest performance, it recorded a net loss of 76 million in the quarter ending in December 2021 owing to losses from investments in joint ventures and associates, primarily from Kerry Express Thailand (KEX) due to intense competition.