(Corrects timing of board changes in paragraph 8)
HONG KONG Feb 18 SCMP Group Ltd, the
publisher of Hong Kong's South China Morning Post newspaper,
said on Monday it is in talks regarding the possible acquisition
of a group of media companies in Hong Kong.
The announcement came almost four hours after its shares
surged as much as 31 percent before the noon trading day lunch
break with no immediate reason given for the jump. The shares
closed up 23 percent at HK$2.15, prior to a trading suspension.
The company said in its stock exchange statement that it was
unaware of any reason for the stock price jump.
For full statement, click here
Trading in SCMP's shares on Monday was unusual, with 3.76
million shares traded ahead of the halt, well above its normal
average. On Friday, 274,000 SCMP shares traded, according to
Thomson Reuters data.
A snapshot of the broker queue for trading in SCMP Group
shares suggests that retail and warrant traders were active in
the stock at the time of the halt. The otherwise thinly-traded
stock saw volumes hit their highest since May 2009 with the
sharpest spike coming an hour into the open.
The newspaper, the largest circulation English daily in Hong
Kong, is controlled by billionaire Robert Kuok through Kerry
Media Ltd. Kuok owns a sprawling business empire ranging from
the Shangri-La Asia Ltd chain of luxury hotels,
Singapore palm-oil firm Wilmar International Ltd and
home builder Kerry Properties Ltd.
The SCMP disclosed last month a new list of their board of
directors with the main change being that Kuok's son, Kuok Khoon
Ean, is no longer on the board.
The company has a free float of about 25 percent, but that
is expected to fall to 10.6 percent at the end of February after
Kerry Media is forced to buy 225 million shares of SCMP Group to
meet the exercise of an options agreement from 2009.
The stock had previously been halted on Feb. 7 ahead of an
announcement from Kerry Media that it was exercising the option
to buy the shares, which were held by Deutsche Bank, JP Morgan
and Bank of East Asia.
In an announcement made after the trading halt on Monday,
SCMP Group said that it is currently in negotiations with third
parties regarding the possible acquisition of an unidentified
group of media companies in Hong Kong.
If the acquisition materializes, it may constitute a
discloseable transaction for the company under listing rules of
the exchange, the announcement said.
The announcement also said that at this time only a
non-binding term sheet had been agreed.
(Reporting by Stephen Aldred and Anne Marie Roantree;
Additional reporting by Elzio Barreto, Vikram Subhedar and Umesh
Desai; Editing by Michael Flaherty and Matt Driskill)