Joyce shares rebound after privatisation rejected
Shares of Joyce Boutique Holdings rebounded as much as 26.2 per cent to 26.5 HK cents yesterday after independent shareholders rejected the privatisation offer of controlling shareholder Peter Woo Kwong-ching.
Around 99.8 per cent of the votes cast by independent shareholders at a court meeting on Thursday turned down the buyout bid, according to an announcement filed to the Hong Kong stock exchange.
Woo, who holds 72.9 per cent of Joyce, offered to put up HK$88 million, or 20 HK cents per share, to buy out the remaining shareholders.
The offer, representing a 30.1 per cent discount to consolidated net assets, was deemed unattractive by small shareholders.
Woo is barred from making another privatisation offer for the next 12 months.
After the news, the high-end retailer rose 11.43 per cent to close at 23.4 HK cents per share. Kenny Tang Sing-hing, the head of research at Redford Securities, said the price did not reflect the true value of the stock.
'Significant improvements have been seen in the company's business since last year, with net profit surging 150 per cent to HK$4 million in the six months to September,' Tang said. 'Considering the optimistic prospects for the retail sector, small shareholders will not be easily convinced to sell.'
This is the second privatisation attempt by Woo, who is also the chairman of Wheelock.
In December 2007, Woo tried to take the firm private with a buyout bid of 33 HK cents per share.
He withdrew the offer after the retailer's joint-venture partner Marni International decided to take back the control of their tie-up.
Tang said the privatisation bid by Woo might affect the retailer's short to medium-term development.
'The company is less likely to have big expansion plans in the near future, as the controlling shareholder may like to keep the stock price at a rather low level before another privatisation offer,' he said.
Joyce has four multi-brand outlets, including one in Shanghai, and 44 single-brand designer shops.
Sector improving
Analysts say the price does not reflect the true value of the stock
After the privatisation offer was rejected by shareholders, the share price for Joyce rose: 11.4%
