Shares in small hotel and toll-road investor Mexan surged as much as 69 per cent yesterday after the company announced a major reorganisation and special dividend.
The offer to shareholders came as part of Mexan chairman Lau Kan-shan's HK$102.91 million deal to unload his 73.58 per cent stake in the firm to an investor while taking its toll-road operations private.
Mr Lau is offering the equivalent of 30 HK cents per share for the spun-off road assets and the company is offering a further 6.865 HK cents per share in a special dividend if the minority stakeholders agree to the deals.
In the transaction, Mr Lau will sell his 964.54 million Mexan shares - minus rights to the toll-road operations - at 10.67 HK cents each to company director Lun Chi-yim.
In response to the news, shares of Mexan, which had been suspended from trading since last month, jumped to an intraday high of 84 HK cents yesterday before retreating to 68 HK cents, up 37.37 per cent for the day.
The company's core asset is the 800-room Mexan Harbour Hotel in Tsing Yi, which it bought from Hutchison Whampoa for HK$600 million in 2003.