Tat Hong shares soar on potential takeover offer

Stock leaps by 36.7% in afternoon trading before closing 29.6% up at 63.5 cents apiece

Crane supplier Tat Hong Holdings shares shot up yesterday after it announced that it was considering a potential takeover offer.

The stock rocketed as much as 36.7 per cent to 67 cents in early afternoon trading before closing 29.6 per cent up at 63.5 cents.

Tat Hong stock last traded at this level nearly 11 months ago, before it shed nearly 35 per cent to hit a near-12 year low of 41.5 cents last month.

Tat Hong told the Singapore Exchange before the markets opened: "The company has been approached in connection with a potential transaction which may or may not lead to an acquisition of the... company."

Tat Hong said the "discussions are preliminary", with no certainty a deal will eventuate.

Tat Hong has been named as one of a number of possible privatisation targets following businessman Ron Sim's offer to buy out his firm Osim International last week.

An oversupply of cranes in the market has hit Tat Hong's earnings. Turnover on rentals of cranes and general equipment has also been low.
An oversupply of cranes in the market has hit Tat Hong's earnings. Turnover on rentals of cranes and general equipment has also been low. PHOTO: TAT HONG

DBS Research Group singled out the firm in a report last week, noting that its major shareholders hold more than 50 per cent of the company. This would make a buyout much easier to pull off.

It also said that Tat Hong's earnings are being depressed due to the oversupply of cranes in the market.

POTENTIAL TAKEOVER

The company has been approached in connection with a potential transaction which may or may not lead to an acquisition of the... company.

TAT HONG to the Singapore Exchange, before the markets opened

The company reported a net loss $6.7 million for the third quarter ended Dec 31, owing to weak demand in South-east Asia and Australia. It had a profit of $4.5 million in the same period a year earlier.

Turnover fell across all its businesses, which include rentals of cranes, tower cranes and general equipment in the third quarter.

The company warned last month that its performance is expected to be depressed in the 2016 financial year.

A version of this article appeared in the print edition of The Straits Times on March 16, 2016, with the headline 'Tat Hong shares soar on potential takeover offer'. Print Edition | Subscribe