Central Group, Thailand’s most prominent retailer and mall operator, has taken a controlling stake in rival Siam Future Development, at a price of US$400 million.
The flagship property in Siam Future’s portfolio of 19 malls and mixed-use developments is the Ikea-anchored Mega Bangna on the outskirts of Bangkok. Its other properties include La Villa, Esplanade, Market Place and the Avenue – all much more compact neighbourhood developments offering entertainment, dining and convenience stores.
The deal, to be completed through Central’s Central World subsidiary, will give it a 52.15-per-cent stake in Siam Future, with settlement scheduled for August 30. It is unclear if Central will launch a takeover bid for the balance of the business and the company has not declared its intentions.
With rolling lockdowns and regular government-ordered extended closures of shopping malls in Bangkok and regional Thailand, the mall sector has been heavily impacted by the Covid pandemic.
The largest packet of Siam Future shares Central has bought will come from the target company’s largest shareholder Major Cineplex Group, which has seen revenue evaporate since the advent of Covid led to a ban on cinemas.
According to Nikkei Asia, Thai law requires a company to make a tender offer if its stake surpasses 25 per cent, 50 per cent or 75 per cent thresholds, which clearly applies in this case.