Magma Group Bhd is planning to acquire LUMA Hotel in Kota Kinabalu for RM60.9 million through a combination of cash and share issuance, as part of its strategy to expand its hospitality portfolio.
In a filing with Bursa Malaysia, the group said its wholly owned subsidiary Magma Avenue Sdn Bhd has signed a heads of agreement to acquire the LUMA Hotel business along with four adjoining buildings in the Sabah capital.
Under the proposed deal, Magma will acquire 100% equity in HH Home Hotel Sdn Bhd, which owns the LUMA Hotel brand and operations, for RM12.8 million. The payment will be made through a mix of cash and the issuance of 27.15 million new Magma shares.
In addition, the group plans to purchase four buildings where the hotel currently operates from different vendors. Two of the buildings will be acquired from HKT Realty and Gamwon Properties respectively, each for RM16 million, with payment comprising cash and 14.55 million Magma shares per building.
The remaining two buildings will be acquired through equity purchases. Magma will buy 100% of Zenith Everise Sdn Bhd from Alan Wong and Chin Chen Nyap for RM7.6 million, partly paid in cash and 16.36 million shares. It will also acquire Upper Domain Sdn Bhd from Alan Wong and Lee Ka Yi for RM8.5 million, settled via cash and 19.09 million shares.
All shares issued under the deal will be priced at 33 sen each, based on the five-day volume-weighted average price (VWAP) of Magma shares up to March 4.
Magma said the acquisition aligns with its strategy to expand and strengthen its hotel portfolio, while increasing recurring income from its core hospitality business.
The group currently manages Impiana-branded hotels, is involved in property development, and operates the Chagee tea chain in Malaysia.
Magma shares closed one sen lower, or 3.1%, at 31.5 sen on Thursday, giving the company a market capitalisation of RM541.9 million.
