Hovid shares spike 12.5% as investors take advantage of price gap

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KUALA LUMPUR (Sept 18): Hovid's share price climbed 12.5% in the morning session, following the fresh takeover offer made by the controlling shareholders Fajar Astoria Sdn Bhd and David Ho, to pave way for the proposed voluntary withdrawal of the company's listing status on Bursa Malaysia.

Hovid's share price gained four sen with 947,800 shares exchanging hands before the lunch break closing bell. 

SJ Securities Sdn Bhd senior remisier Goh Kay Chong said the surge was likely a result of investors taking advantage of the price gap to buy low and sell high. 

“(Alternatively), they could be buying low from the market and selling high to the offerors at a higher price. Investors are just taking advantage of the situation,” Goh told theedgemarkets.com

On Friday (Sept 14), Hovid announced to the stock exchange that Fajar Astoria and Ho intends to undertake a conditional voluntary takeover offer at 38 sen per share, to buyout 173.1 million shares or 20.95% stake that they do not own.  

The duo collectively hold 79.05% stake in the Perak-based pharmaceutical firm, after a takeover bid was launched in October last year at 38 sen per share. However, they did not manage to garner the required 90% acceptance level that would have allowed a compulsory share acquisition, so as to take Hovid private then. 

In Friday's announcement, Hovid's board said Fajar Astoria and Ho had requested the company's board to consider undertaking a voluntary withdrawal of Hovid's listing from the Main Market of Bursa Malaysia, in view of the company failing to meet the required 75% public spread. 

It would be interesting to see if the minority shareholders would change their minds this round, to accept the offer 11 months after the first takeover bid.