Chow Tai Fook Enterprises Ltd.’s $4.5 billion offer to buy NWS Holdings Ltd. only became public early Tuesday, but stock prices were jumping days earlier.
(Bloomberg) — Chow Tai Fook Enterprises Ltd.’s $4.5 billion offer to buy NWS Holdings Ltd. only became public early Tuesday, but stock prices were jumping days earlier.
Shares of NWS, the industrial flagship of New World Development Co., surged nearly 8% Friday in Hong Kong before trading got suspended — the reason being a pending release of potential inside information. The broader Hang Seng benchmark fell 1.7% as markets reopened after a holiday.
A total of 12.6 million shares changed hands for NWS, marking its highest daily trading volume in more than two years.
The moves are “a bit strange,” said Patrick Wong, an analyst at Bloomberg Intelligence. “There may be questions about leakage of insider information.”
The issue at hand was a HK$35.5 billion ($4.5 billion) deal by Hong Kong’s billionaire Cheng family to take the company private. The offer is HK$9.15 apiece, according to a Tuesday statement to Hong Kong stock exchange, a 14.5% premium over the last closing price.
READ: Tycoon Cheng’s Family to Take NWS Private in $4.5 Billion Deal
New World Development, which currently holds 2.38 billion NWS shares, will receive about HK$21.8 billion from the disposal. The company’s stock, which was also suspended, jumped as much as 10% as trading resumed on Tuesday. A unit’s 4.125% perpetual bond gained 3.8 cents on the dollar to 71.1 cents, the most in almost six months, according to Bloomberg-compiled prices as of 11:21 a.m. in Hong Kong.
NWS rallied as much as 10% upon trading resumption. A company spokesperson declined to comment, while an email to Chow Tai Fook’s media relations account wasn’t immediately responded.
A Hong Kong exchange spokesperson said the bourse doesn’t comment on individual companies. The Securities and Futures Commission declined to comment on specific firms.
–With assistance from Kiuyan Wong and Dorothy Ma.
(Updates with analyst comment, latest share moves)
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