CapitaMalls shares surge on buyout offer, index near 7-month top

SINGAPORE (Reuters) - Shares of CapitaMalls Asia surged as much as 22 per cent to its highest in more than a year on Tuesday after CapitaLand offered to buy out minority shareholders in the shopping mall operator.

CapitaMalls shares hit as high as $2.21, just short of the offer of $2.22 per share from CapitaLand - Southeast Asia's biggest property developer. The gain pushed up the benchmark Straits Times Index to its highest in nearly 7 months.

Nearly 115 million CapitaMalls shares were traded, more than 11 times its average full-day volume over the past 30 days. CapitaLand shares jumped more than 5 per cent.

Maybank Kim Eng maintained its "Buy" rating on the CapitaMalls shares, with a target price of $3.85.

"If the privatisation is successfully executed, it would be one of CapitaLand's most astute acquisitions, allowing it to leverage on CapitaMalls' retail expertise while keeping it as a key earnings driver," the brokerage said.

The Straits Times Index rose 1 per cent to 3.248 - highest since Sept 20 and outperforming a flat Asian market .

Among other gainers, shares of Hotel Properties surged to a near 11-month high after a consortium that includes Singapore tycoon Ong Beng Seng and Wheelock Properties offered to buy Hotel Properties for $3.50 per share.

Hotel Properties shares advanced as much as 13 per cent to its highest since May 20. Shares of Wheelock property gained 5.4 per cent to reach an 8-month high of $1.84.