TOKYO (Reuters) - Shares of Japan’s Hitachi Chemical were untraded on Monday, hit with a glut of buy orders after a report that parent company Hitachi Ltd was considering a sale of its stake at a hefty premium of more than 40 percent.
Hitachi Ltd is looking to offload its 51 percent stake in Hitachi Chemical for more than 300 billion yen ($2.70 billion), Kyodo news reported after the market closed on Friday.
That would value the chemical firm at around 588 billion yen, representing a 42 percent premium to Friday’s closing price, according to Reuters calculations.
“We have been considering multiple options for achieving higher corporate value but nothing has been decided at this moment,” Hitachi Ltd said in a statement.
Shares of Hitachi Chemical were untraded, flooded with buy orders at 2,386 yen in early afternoon trade and up by their daily limit of 20 percent.
“Hitachi has spun out companies within its group in the past and increased their profitability, so such expectations are supporting Hitachi Chemical,” said a general manager at a domestic brokerage. “Hopes for a premium being added to Hitachi Chemical are leading to bids.”
Shares of Hitachi Ltd were up 5.2 percent at 3,318 yen at 0351 GMT, making it the top percentage gainer on the Nikkei 225, which was up 0.4 percent.
Reporting by Takashi Umekawa and Shinichi Saoshiro; Editing by David Dolan