759 Store owner’s shares double on hopes death of founding chairman Lam Wai-chun may lead to restructuring
Executive director Tang Fung-kwan to take over as chairwoman of CEC International after the death of Coils Lam Wai-chun on Saturday
CEC International Holdings, which owns the popular 759 Store in Hong Kong, saw its share price more than double on Monday morning as brokers speculated there may be a restructuring of the company after its founding chairman died at the weekend.
The share price reached a 21-month high of HK$1.04 before the lunch break on Monday, up by 124 per cent from Friday’s close of 46.5 HK cents. It closed on Monday at 89 HK cents, up 91 per cent from Friday close.
The rise followed the sudden announcement on Sunday night that Coils Lam Wai-chun, the founding chairman of the company and its flagship 759 Store, had died at the age of 60 on Saturday at Hong Kong Sanatorium & Hospital.
“The passing away of the founding chairman is sad news. However, it also gives hope to investors that it may pave the way for a major restructuring, or even merger and acquisition opportunities. This has led buyers to rush to bet on the stock on Monday,” said Jeffrey Chan Lap-tak, founding partner of Oriental Patron Financial Group.
“The 759 Store in fact is very popular and has a leading market position among snack retailers. Its [financial] results were not good in recent years, mainly due to an overexpansion of the number of stores a few years ago. But the reduction of stores in the past two years has already helped the company get back on track. It may well be a target of acquisition,” he said.
