Shaw Brothers (Hong Kong) shot up as much as 58.18 per cent yesterday after its largest shareholder unveiled a proposal to privatise the company for HK$1.33 billion.
The stock, which resumed trading yesterday from being suspended from December 15, rose 55.97 per cent to end at HK$12.68 after hitting a high of HK$12.86.
About 3.6 million shares worth HK$45.73 million changed hands.
Shaw Holdings, owned by Sir Run Run Shaw, has a 74.92 per cent stake in Shaw Brothers and has offered to buy the rest for HK$13.35 a share.
Analysts said the buyout would pave the way for a sale of Shaw Brothers, a deal that had previously drawn bids from investors who were interested in the company's 26 per cent stake in Television Broadcasts (TVB), Hong Kong's largest broadcaster.
Shaw Brothers is expected to win support from its minority shareholders for the privatisation given the high premium and a pledge from Arnhold & S. Bleichroeder Advisers, its second-largest stakeholder with 10.2 per cent, to vote for it.
