April 15, 2014 / 5:16 AM / 4 years ago

CapitaMalls shares surge on buy-out offer, index near 7-month top

SINGAPORE, April 15 (Reuters) - Shares of CapitaMalls Asia surged as much as 22 percent to its highest in more than a year on Tuesday after CapitaLand Ltd offered to buy out minority shareholders in the shopping mall operator.

CapitaMalls shares hit as high as S$2.21, just short of the offer of S$2.22 per share from CapitaLand - Southeast Asia’s biggest property developer. The gain pushed up the benchmark Straits Time Index to its highest in nearly 7 months.

Nearly 115 million CapitaMalls shares were traded, more than 11 times its average full-day volume over the past 30 days. CapitaLand shares jumped more than 5 percent.

Maybank Kim Eng maintained its “Buy” rating on the CapitaMalls shares, with a target price of S$3.85.

“If the privatization is successfully executed, it would be one of CapitaLand’s most astute acquisitions, allowing it to leverage on CapitaMalls’ retail expertise while keeping it as a key earnings driver,” the brokerage said.

The Straits Times Index rose 1 percent to 3.248 - highest since Sept. 20 and outperforming a flat Asian market .

Among other gainers, shares of Hotel Properties Ltd surged to a near 11-month high after a consortium that includes Singapore tycoon Ong Beng Seng and Wheelock Properties (Singapore) Ltd offered to buy Hotel Properties for S$3.50 per share.

Hotel Properties shares advanced as much as 13 percent to its highest since May 20. Shares of Wheelock property gained 5.4 to reach an 8-month high of S$1.84. ($1 = 1.2522 Singapore Dollars) (Reporting by Andrew Toh; Editing by Himani Sarkar)

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