The move is seen as an effort on CPN’s part to consolidate its position through the B36.7bn partnership in one of Bangkok’s prime property development projects.
The acquisition has turned CPN into the second-largest shareholder in the 47-year-old hotel group, following only Chanut and Children Co, which controls 49.74%.
Last March, CPN joined Dusit Thani to develop a mixed-use project worth about B36.7 billion on land it leases in Bangkok from the Crown Property Bureau.
CPN told the Stock Exchange of Thailand (SET) that its board of directors on May 9 approved the purchase of 194,926,920 shares in Dusit Thani Plc from the total of 850,000,000 shares for a total estimated price of B2.14bn.
The purpose of the May 9 transaction is a long-term investment, and CPN is not involved in any business management at Dusit Thani, the company said.
The change of shareholding structure has no impact on the direction, management control and business operations of Dusit Thani Plc, the company said.
Suphajee Suthumpun, Group Chief Executive of Dusit Thani Plc, declined to comment on the deal, insisting only that the acquisition has no impact on the business plans or operations of the group.
A market analyst at Asia Plus Securities Plc said the measure is part of CPN’s indirect investment to gain extra revenue and profit apart from its own investment.
In the past, CPN increased revenue through its own development and gradually diversified to develop its own condos at its existing shopping complexes in Chiang Mai, Chiang Rai, Rayong and Khon Kaen provinces.
There are over 20 Central shopping complexes awaiting residential development in the future, said the analyst, who asked not to be named.
Apart from branching out to condos, the company has adopted a joint venture strategy over the past two years by forming an alliance with Ek-Chai Distribution System Co, the operator of Tesco Lotus hypermarket, for future development.
The new joint venture company formed by Tesco and CPN will be called Synergistic Property Development Co.
Each company will hold a 50% stake in the joint venture agreement. Details of the business model are being studied.
Sukit Udomsirikul, managing director at Maybank Kim Eng Securities Thailand, said CPN's main objective is to invest in a mixed-use project being developed by both CPN and Dusit Thani as opposed to being involved in business management.
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