Plenitude to take over The Nomad Group

PETALING JAYA: Plenitude Bhd has offered to takeover The Nomad Group Bhd for RM1.25 a share, with the objective of de-listing the group.
The offer price would be satisfied through the issuance of new ordinary shares of RM1.00 each in Plenitude at an issue price of RM2.50 each. The offer is expected to be completed by the second quarter of 2015.
Plenitude told Bursa Malaysia yesterday that each holder of the offer shares who accepts the offer will receive one consideration share for every two offer shares surrendered.
"The proposed offer represents an opportunity for the company to expand its hotel segment in a bid to diversify its earnings base and enhance its source of recurring income," Plenitude said.
In separate announcement, The Nomad Group said it will deliberate on the offer and decide whether to seek an alternate person to make a take-over offer for the offer shares.
The Nomad Group, a home-grown brand, is an integrated provider and operator of hotels, serviced residences and serviced offices.
Through its hotel segment, the Nomad Group has a 295-room hotel known as Novotel Kuala Lumpur City Centre; a 180-suite hotel known as The Nomad SuCasa; a 131-room hotel known as GLOW Penang; and a 66-suite serviced residences known as The Nomad Serviced Residences Bangsar.
For the financial year ended June 30 2014, Plenitude's hotel segment, which is comprised solely of the Plenitude Group's Four Points by Sheraton Penang hotel, contributed about 4.13% of the group's total revenue.
Plenitude said its recent acquisition of The Gurney Resort Hotel & Residences is expected to be completed by the first half of 2015 with revenue contribution from the hotel segment expected to grow further.
"Given that Plenitude's hotels are currently situated in Penang, the offer enables Plenitude to tap into the hotel sector in Kuala Lumpur by virtue of The Nomad Group's three properties situated in that region.
"As Kuala Lumpur and Penang are the major tourism hubs of Malaysia, the enlarged Plenitude group would be in a better position to establish its presence in the hotel and hospitality industry in Malaysia with an enlarged stable of properties comprising two hotels in Kuala Lumpur, three hotels in Penang and a serviced residences in Kuala Lumpur," it said.
The enlarged Plenitude group will tap into the hotel management expertise of The Nomad Group as well as enjoy the inherent advantages of economies of scale through a more effective and efficient deployment of resources.
This, it said, can be achieved by the pooling of resources in hotel management, centralised procurement of goods and services as well as cross selling and cross branding opportunities.
"In the medium term, a larger scale would provide an opportunity to grow the "Nomad" brand further, as a larger pool of resources will be invested in branding and marketing activities, creating an avenue for the enlarged Plenitude group to venture into the provision of hotel management services and franchising the "Nomad" brand for properties of third parties," it said.
Upon completion of the offer and in the longer term, Plenitude said its shareholders are to benefit from the potential growth in revenue streams contributed by the hotel segment whilst still be able to reap the contributions from the property development segment.
It said that the issuance of consideration shares will allow Plenitude to avoid having to raise cash proceeds upfront via borrowings to satisfy the consideration under the offer.
Plenitude closed 3 sen , or 1.29%, lower to close at RM2.29 yesterday, while The Nomad Group's shares were up 9 sen, or 8.43% to close at 90 sen.