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Central to Buy Controlling Stake in Mega Bangna Operator, Pushing Farther into Suburbia

Mega Bangna Shopping Mall

Central Group is buying a controlling stake in Siam Future Development, the operator of Mega Bangna as the retail monolith pushes further into suburbia.

Siam Future runs 17 projects in addition to Meta, the top mall in suburban Bangkok. It opened in 2012 with IKEA’s first Thai outlet as its anchor sore. SFD reported consolidated revenue of 972 million baht in the first half os 2021, up 32 percent from 2020. Net profit jumped 20 percent to 785 million baht.

Central’s 13.3-billion-baht acquisition is part of the mid-range expansion plan of Central Pattana, the group’s mall-operations arm. Executives are betting on 10 percent growth per year through 2025 and will pursue mergers and other acquisitions in more potential high-growth assets.

The way to do that, Central says, is buy building or redeveloping malls into mixed-use projects that include residential, hotel and office tenants.

Central Pattana’s revenue in the first half was flat from 2020 at 16.5 billion baht, a result of Thailand’s repeated mall closures and coronavirus restrictions. Net profit inched up 0.9 percent to 5.1 billion baht.

Central Group operates in more than 3,700 locations globally.

The Siam Future Development deal is being done through the Central World subsidiary, which will buy 1.1 billion SFD shares to grab a 52.15-percent stake. The sale is planned for Aug. 30.

Nearly 31 percent of the share Central is buying are coming from SFD’s largest shareholder, Major Cineplex Group. Each share was priced at 12 baht.

After the completion of the transaction, Central is expected to make a tender offer for the remaining shares at 12 baht each.

When buying a listed entity in Thailand, a company is mandated to make a tender offer if its stake would surpass 25, 50 or 75 percent as a result of the bid. If Central were to take full control of Siam Future Development, it would need an additional 12 billion baht to purchase the remaining shares.

Central has not made clear if it will fully take Siam Future Development. At the Stock Exchange of Thailand, companies above market capitalization of 300 million baht can remain listed until their floating shares go less than 20 percent of their common stock.