As stocks rally, strange things seem to be happening. ConnectCounty Holdings Bhd said last Tuesday in a filing that it could be targeted by S5 Systems Sdn Bhd for a reverse takeover (RTO).
This was in response to a blog post on an investing site that said ConnectCounty could be targeted by S5 Systems for a backdoor listing. The post has since been removed.
ConnectCounty, which makes cables, wires, connectors and related products, clarified that it is “in negotiations with the relevant party pertaining to the possible RTO exercise involving S5 Systems”. However, nothing has been signed yet.
S5 Systems has been in the news for partnering a number of listed companies to bid for the billion-ringgit National Integrated Immigration System contract.
ConnectCounty must be upset with its staff, team of advisors and investment bankers for allowing market-sensitive information to be leaked to the public.
But interest in its stock had already picked up on May 14 . Its share price rose to an intraday high of 11.5 sen from eight sen. On June 12, when the volume traded surges to 214.97 million shares and its share price reached an intraday high of 37.5 sen, then the highest in over five years. The stock closed at 32 sen last Friday.
It is also worth noting that on June 11, major shareholder Ang Chuang Juay, started disposing of shares in ConnectCounty. A total of 1.6 million shares were transacted for RM535,992.
A coincidence perhaps? Whatever it is, many will be keeping watch on ConnectCounty and its RTO talks. Should the regulator be looking into this?