Shares in Shimao International Holdings, an overseas investment arm of Shanghai-based developer Shimao Group, surged 42.86 per cent yesterday after controlling shareholders announced plans to privatise the firm for HK$870 million. Chairman Hui Wing-mau and daughter Carol Hui Mei-mei, who together own 74.7 per cent of Shimao International, want to buy all the company's shares as their prices have been 'unsatisfactory' for more than one year. Mr Hui is offering HK$1.05 for every Shimao share, representing a premium of 50 per cent compared with the 70 HK cents when the shares last traded on April 4 before suspension. The shares declined 13.6 per cent in the 12 months to April 4 compared with a 26.4 per cent gain in the Hang Seng Index during the period. They resumed trading yesterday and closed at HK$1. The company said the stock's trading volume had been thin, with 502,786 shares, or 0.24 per cent of the total issued shares being traded a day on average in the past six months. Shimao International has been involved in commercial developments outside the mainland, including projects in Hong Kong and in and near Russia. It made a loss of HK$193.82 million last year, due to provisions for land appreciation tax and a loss on projects it operated near Russia after restrictions imposed by the Russian government. 'Given the unsatisfactory financial performance of the group ... the ability of the company to take advantage of its listing status to raise funds from the equity markets may be limited and any significant improvement in this regard in the foreseeable future is unlikely,' the company said. The company said it would not be justifiable to maintain the listing status after considering the cost and management resources involved. The privatisation will be subject to shareholders' approval. Mr Hui is also the controlling shareholder of mainland-focused Shimao Property Holdings, which listed in Hong Kong in July last year.