Ascott On A Roll After Buyout Offer

Source : TODAY, Wednesday, January 9, 2008

Shares of Ascott Group surged 41.3 per cent yesterday after its parent CapitaLand offered to buy out minority owners and take the luxury residences operator private.

The shares rose 50 cents to $1.71, just 2 cents below the $1.73 that CapitaLand, South-east Asia’s largest property firm, is dangling before Ascott shareholders in an unconditional cash offer that values the luxury residences operator at $2.8 billion.

Nearly 63 million Ascott shares changed hands yesterday, making it the most actively traded stock.

Ascott shareholders are likely to accept CapitaLand’s offer, said a UBS research note yesterday. “We believe the offer is not unreasonable and is 20 per cent above the three-month volume-weighted average price of $1.44 a share. Given the fragmented shareholding and volatile market outlook, we think the probability of investors rejecting the bid and a higher offer is low.”

According to analysts, the developer sees value in Ascott - whose shares fell more than 24 per cent last year - that has not been recognised by the market.

CapitaLand shares fell 33 cents, or 5.3 per cent, to $5.92 yesterday amid concerns that it may be overpaying for its 66.5 per cent unit.