Midland chairman spends HK$330m to raise his stake to 28pc
Paying almost a 30pc premium to market price, Freddie Wong buys back HK$330m in shares
Shares in real estate broker Midland jumped to a 13-month high yesterday after chairman Freddie Wong Kin-yip announced he bought shares worth HK$330 million to raise his stake to 28.25 per cent in the company.
The stock at one point rose to as high as HK$4.38 before closing the day at HK$3.97, up 3.11 per cent. The Hang Seng Index dropped 0.79 per cent to 23,003.64 points yesterday.
Wong informed the company that he bought, through Sunluck Services, 66.15 million shares via an off-market transaction from an independent third party, Midland said in a stock exchange filing.
Wong's investment translates into about HK$5 a share, meaning he paid an almost 30 per cent premium on Thursday's closing price of HK$3.85.
"Although the real estate broking industry is bleeding due to a sharp decline in transactions as a result of the government's extra stamp duties, the long-term outlook remains positive. Therefore I will continue investing time, money and effort to show my support in the company and bring the team out of the chilly winter," Wong said.
Mau Wang-bong, chief operating officer at Apex Benchmark, the second biggest shareholder, said Wong had not bought the shares from them.
"It is positive news. It indicates his commitment in the company," Mau said.
Wong has been increasing his stake in the company in the face of a potential corporate raid after real estate fund Apex raised its stake in Midland to 9.57 per cent last month from 7.5 per cent in October.
Factoring in the HK$80 million he spent earlier to buy Midland shares, Wong has now spent nearly HK$410 million this month in total to increase his stake.
The company did not disclose the identity of the seller but there is speculation in the market that it might have been Sun Life Financial, Midland's third largest shareholder.
According to stock exchange data, Sun Life has a 9.09 per cent stake, or 65.28 million shares in Midland. It has been buying the shares in the price range of HK$2.75 to HK$3.73 since July last year.