Active Trades in Tan Chong Fuel Talk of Takeover Bid
Goh Eng Yeow – Straits Times
Thinly traded Nissan car distributor Tan Chong International sprang to life on Thursday when a series of married trades propelled it to the top spot among actively traded counters.
The trades (totalling 158.65 million shares) were all transacted at HK $2.60 apiece in the morning session.
The biggest trade, a block of 60.4 million shares, was crossed at 11.11am, followed by another parcel of 38.95 million shares 12 minutes later.
This was followed by block trades of 1.31 million shares, 37.85 million shares and 20.14 million shares in quick succession. Married trades occur when a seller and buyer agree on the price without the shares going on to the open market.
Few traders could fathom what was going on. “Tan Chong has been off my radar screen for so long that I do not even watch it any more,” said dealer Bernie Lee.
But the sheer size of the transactions, which accounted for about 7.9 per cent of the motor car distributor’s total shares, has stirred talk that the firm is a takeover target. The activity stirred the sleepy counter into life, with traders chasing its price to an intra-day high of HK $2.20, a gain of 16.4 percent at one point.
It ended 16 HK cents, or 8.47 per cent, higher at HK $2.05 with 159.29 million shares changing hands. Excluding the married trades, 647,000 shares were traded.
Traders are hoping that Tan Chong, which is listed in Hong Kong but traded on GlobalQuote — the Singapore Exchange’s over-the-counter market – will be able to shed more light on the identity of the parties behind the transactions.
Tan Chong’s latest annual report states that the biggest shareholder is Tan Chong Consolidated (TCC) with a 57.81 per cent stake. Then comes Malaysian billionaire Quek Leng Chan’s Guoco Group with 19.88 per cent.
Old-time traders recalled that more than 10 years ago, a dispute between the two founding families of Tan Chong became public when one side filed a petition in Malaysia’s High Court to dissolve TCC, citing “irreconcilable differences.”
Since then, the company has appeared on and off the radar screen as a possible takeover target but the thinly traded counter rarely attracts investors’ interest and there is no analyst coverage. While its principal business is selling Nissan cars, Tan Chong’s crown jewels are the vast tracts of land it holds in Singapore that can be redeveloped into condos.
These include prime sites in Bukit Timah, which house its showroom and workshop and are adjacent to the upmarket condo Wilby Residences, which the firm itself developed. The company also owns freehold land in Aljunied and Woodlands.
Reprinted courtesy of Straits Times