Quek increases Guoco takeover offer to HK$9.4b
Buyout bid for investment firm boosted 13.6pc but still at 24.6pc discount to net asset value
Kanis Li and Jeanny Yu
Malaysian tycoon Quek Leng Chan is now offering HK$9.37 billion, or HK$100 per share, to take Guoco Group private.
Trading in the shares of Guoco, a Hong Kong investment firm controlled and chaired by Quek, was suspended yesterday morning pending an announcement.
The company announced the 13.6 per cent higher offer from HK$88 last night.
GuoLine Overseas, a unit of Hong Leong (Malaysia), of which Quek is the chairman and chief executive, will acquire all the remaining issued shares of Guoco at the new price, which it said it would not increase.
The enhanced offer price represents a discount of 24.6 per cent to Guoco's adjusted consolidated net asset value of HK$132.62 per share at the end of June last year.
Analysts had expected Quek to raise the offer price to ensure a successful privatisation.
Hong Leong, a Malaysian company, offered to pay HK$8.25 billion, or HK$88 in cash per share, to take the firm private, Guoco announced in December last year.
The share price rose to HK$97.45, the highest level since the privatisation plan was announced, before the stock was suspended. It had traded at HK$92.05 or above since the announcement, reflecting the market's view that Hong Leong should offer a higher price.
The enhanced offer is at a premium of 2.6 per cent to the stock's last traded price.
"Guoco is trading at a big discount to its net asset value, and the low valuation prompted Quek to seek its privatisation again," a Hong Kong hedge fund manager, who asked not to be named, said before last night's announcement.
"It remains a big question on whether the deal would succeed this time."
A bid by Quek to privatise Guoco in 2004 failed because the offered price was lower than the market price at the time.
Quek owns 74.85 per cent of Guoco, according to the Hong Kong stock exchange website. He also owns 49.27 per cent of Hong Leong, a holding company for firms engaged in a wide variety of industries.
The stock will resume trading today.