AsiaPhos Announces Major Reverse Takeover of Malaysian Hotel Asset: What Retail Investors Must Know

Summary of the Announcement

AsiaPhos Limited has announced its intention to acquire approximately 97.41% of Exquisite Mode Sdn. Bhd. (“Target Company”), a Malaysian property developer, from United Malayan Land Bhd. (“Vendor”). This proposed acquisition is set to trigger a reverse takeover under Singapore Exchange Catalist rules, subject to shareholder approval at an upcoming EGM.

Key Points Retail Investors Should Note

• AsiaPhos will acquire nearly all shares of Exquisite Mode Sdn. Bhd., which owns the 5-star Amari Johor Bahru hotel, serviced residences, a retail podium, and parking lots in the heart of Johor Bahru.
• The purchase price is up to S\$59.42 million, paid entirely via newly issued AsiaPhos shares at S\$0.006 per share—meaning significant new share issuance and possible dilution for existing shareholders.
• If completed, AsiaPhos will transition from a trading and fertiliser business into property development and hospitality, marking a dramatic shift in its business strategy and risk profile.
• This acquisition is highly price sensitive as it could radically transform the company, its valuation, and its future prospects.

Detailed Breakdown of the Deal

Background and Strategic Rationale

AsiaPhos has recently sought to diversify its business, following earlier moves into wholesale fertilisers. The board believes acquiring Exquisite Mode’s assets presents an opportunity to tap into the growth potential of Johor Bahru, especially given the proximity to the upcoming Johor Rapid Transit System (RTS) station and the Singapore–Johor Special Economic Zone. The assets include:

• Amari Johor Bahru Hotel: 242 rooms, 11 storeys, 5-star rating
• 92 serviced residences/suites
• 2-storey retail podium
• 496 car parking bays

All are part of the Suasana Iskandar Malaysia development, a prime location expected to benefit from increased demand for real estate and hospitality services.

Transaction Structure and Valuation

The agreed valuation for the Target Company is S\$61 million, subject to an independent valuation. AsiaPhos will issue new shares at S\$0.006 per share to the Vendor (and its nominees), amounting to a total consideration of up to S\$59.42 million. If an independent valuation exceeds S\$67.1 million (110% of S\$61m), the purchase price and shares issued will be adjusted upwards.

The Vendor will also arrange for the minority shareholder (holding 2.59%) to sell their stake to AsiaPhos, so that AsiaPhos will own 100% of Exquisite Mode Sdn. Bhd. upon completion. The total consideration for full ownership could reach up to S\$61 million.

Key Conditions and Timeline

• The deal is subject to execution of definitive agreements within 90 days of the term sheet, due diligence, regulatory approvals, independent valuation, and shareholder approval in an EGM.
• If any regulatory conditions are deemed unacceptable by the Vendor, they may renegotiate or terminate the deal without penalty.
• The Vendor has a one-year exclusivity period, during which neither party can pursue competing deals.
• The deal is targeted for completion within one year of signing definitive agreements.

Potential Shareholder Impact and Risks

• Significant Dilution: Existing shareholders should note the potential dilution from substantial new share issuance. For example, at S\$0.006 per share, up to 9.9 billion new shares could be issued.
• Change in Business Nature: AsiaPhos will shift away from trading and fertilisers to property development and hospitality, with exposure to Malaysian real estate market risks.
• Reverse Takeover: Control of AsiaPhos may change, as the Vendor will become a major shareholder.
• Uncertainty: There is no guarantee that the deal will be completed. Definitive agreements, due diligence, regulatory and shareholder approvals are all required, and the deal can still be terminated.
• Share Price Volatility: The announcement is price sensitive. Shareholders and investors should expect increased volatility as more details, valuations, and regulatory feedback emerge.

Other Noteworthy Details

• Some directors and shareholders of AsiaPhos and the Vendor are related by family, but none hold material interests in the transaction outside their corporate roles.
• No independent valuation of the Target Company has been done yet.
• AsiaPhos will announce further details, including financial effects, once definitive agreements are signed.
• The company has appointed Evolve Capital Advisory Private Limited as its sponsor and financial adviser for this deal.

What Should Shareholders Do?

Shareholders are urged to follow all future announcements closely. The deal is not guaranteed to go through: it is subject to many conditions and approvals. If successful, it could dramatically change the company’s prospects, structure, and risk profile. If unsuccessful, there may be no impact. The share price could react strongly to further developments, regulatory feedback, and the outcome of the shareholder vote.

AsiaPhos will make the Term Sheet available for inspection at its registered office for three months.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The proposed acquisition is subject to multiple conditions and approvals, and there is no guarantee it will be completed. Shareholders should exercise caution and consult their own advisors before making any investment decisions. The information above is based on public announcements by AsiaPhos Limited as of 1 September 2025.

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