MCL soars after HK Land offer to take developer private

Shares of residential property developer MCL Land jumped 25.6 per cent to close at $2.45 on Friday, a day after parent company Hongkong Land said it planned to delist the counter from the Singapore Exchange.

Dealers said the rise in share price was expected as investors moved in to narrow the gap between its last traded price and the offer price of $2.45 by Hongkong Land to take the firm private. Around 3.5 million shares valued at $8.5 million changed hands on Friday, much higher than the counter’s average volume of about 115,000 shares a day over the last six months.

JP Morgan said the delisting could help in “re-branding MCL Land’s projects under the HKL brand name, which appears to be more recognised in the market.” Hongkong Land currently owns a 77.4 per cent stake in MCL and its offer values the latter at $906 million. Upon full acceptance, Hongkong Land will be paying an estimated $205 million for the acquisition, using its existing cash resources.

Source : Today – 28 Aug 2010

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