TAKEOVER
image

China stock market

Advanced Card Systems soars 17 per cent to all-time high on HNA takeover offer

PUBLISHED : Friday, 13 January, 2017, 8:56pm
UPDATED : Friday, 13 January, 2017, 8:56pm

Advanced Card Systems, a top supplier of PC-linked smart card readers in Asia, saw its shares surge as much as 17 per cent on Friday to all-time highs, after it announced a subsidiary of Hainan Airlines had agreed to purchase a majority stake for HK$521.8 million in cash.

Shares of Hong Kong-based ACS finished Friday’s trading session at a record closing high of HK$2.61, up 15.5 per cent. Earlier in the session, it spiked 17 per cent to hit a historic high of HK$2.65. The shares had resumed trading on Friday after three days of suspension.

The surge made the stock the third biggest percentage gainer of the day in the Hong Kong market. Daily turnover reached HK$42.5 million, with approximately 16,227,000 shares changing hands.

The gains came after ACS announced that four of its shareholders had entered an agreement to sell a combined 61.39 per cent stake to HNA EcoTech Pioneer Acquisition, in which Hainan Airlines Group holds a 90 per cent stake. The acquisition price was HK$2.66 a share.

HNA EcoTech will also make a “mandatory unconditional cash offer” for all the other shares at a price of $2.66, as required by the Hong Kong code on takeovers and mergers, the announcement said.

“The announcement has spurred a surge in the shares today,” said Alex Wong, director of asset management for Ample Capital. “However, the upside may be limited, as the rally seems speculative and not based on fundamentals.”

ACS, founded in 1995, supplies a range of smart card reading and writing devices for various applications and industries. Last year, the company reported that its first-half revenues had decreased 46 per cent to HK$58 million and posted a profit loss of nearly HK$20 million, citing the global economic slowdown.