Wheelock Properties saw its shares soar to a 52-week high yesterday after its parent company launched a HK$6.9 billion privatisation bid for the developer.
The generous offer proposed by Wheelock & Co, chaired by Peter Woo Kwong-ching, sent the shares up 136.77 per cent to close at HK$12.62.
On Tuesday, Wheelock & Co announced it would pay HK$13 in cash for each share in the unit, a 144 per cent premium above the stock's closing price on April 16, the last day it traded.
The move came less than two weeks after Woo's plan to privatise the family's 72.9 per cent-owned Joyce Boutique Holdings was rejected by independent shareholders.
Jeff Yau, an associate director at DBS Vickers Securities, said shares of Wheelock Properties were trading at a 60 per cent discount to net asset value before the proposed privatisation.
Yau said the low liquidity of Wheelock Properties shares also made it difficult to raise funds in the equity market. 'It is meaningless to hold a listed entity which is unable to tap the capital market to fund its expansion,' he said.
Last month, Wheelock Properties and New World Development won MTR Corp's tender for the HK$18 billion luxury residential project above Austin Station in West Kowloon.