NOL shares surge on takeover talks

SINGAPORE (BLOOMBERG) - Shares of Neptune Orient Lines surged to their highest in almost seven months in Singapore trading after Southeast Asia's biggest container shipper confirmed it's in exclusive talks to be acquired by France's CMA CGM.

NOL shares rose by as much as 5.4 per cent to S$1.18 on Monday (Nov 23), their highest intraday level since April 29. CMA CGM has until Dec 7 to complete a due diligence review and negotiate the definitive agreements for the offer, NOL said in a statement on Saturday. Singapore's national shipping line is 67 per cent-owned by state investment company Temasek Holdings.

A deal would come at a time global shipping companies grapple with ways to revive earnings amid a glut of new vessels, shrinking demand and declining prices. Liners have idled about 5 per cent of the global fleet, slashed costs, sold assets and cut employees in an attempt to stem years of losses as sluggish global growth and an over-supply of vessels eat into record low shipping rates.

Supply growth is expected to outpace demand for dry-bulk and tanker markets in 2016 and companies have been searching for ways to make money.

NOL shares have surged over 40 per cent so far this year on acquisition talks.