SCMP Group halts trading after shares surge 23pc
SCMP Group, which publishes the South China Morning Post, halted trading in its shares on Monday after they surged 22.9 per cent to HK$2.15, the highest close in nearly four years.
In a filing with the Hong Kong stock exchange after the market closed, the company said it was "in negotiation with third parties regarding possible acquisition of a group of media companies in Hong Kong".
It said it had entered only into a non-binding term sheet for the possible acquisition but did not give details.
The shares shot up by as much as 30.9 per cent during yesterday's trading.
The board said in the filing it was unaware of any reasons for recent increases in the share price and trading volume apart from the acquisition talks and the announcement on February 7 that Kerry Media had exercised its rights to 14.4 per cent of the company's issued share capital held by three banks.
Kerry Group holds 74 per cent of SCMP Group. The planned share transfer, expected to be exercised on or after February 25, will decrease the public float to 10.6 per cent. At that point, the public float will have fallen below the 25 per cent minimum prescribed in the listing rules. The company must then halt trading of its shares until the minimum public float is restored.
The South China Morning Post, established in 1903, is the only paid-for English-language daily in the city. SCMP Group reported a decrease of 26 per cent in net profit to HK$184 million for the half year to June because of higher production costs, while revenue increased 3 per cent to HK$458.1 million.
Trading in the shares is expected to resume today.