Hot Stock JT International jumps 19% on take-over offer

by **Cals** Tue 01 Apr 2014, 13:54

Hot Stock JT International jumps 19% on take-over offer

Business & Markets 2014

Written by Chong Jin Hun of theedgemalaysia.com

Tuesday, 01 April 2014 10:09

KUALA LUMPUR (Apr 1): Top gainer JT International Bhd jumped as much as 19% after its controlling shareholder made a take-over offer for the remaining shares in the tobacco firm.

At 9.38am, JT International which resumed trading today, was traded at RM7.67 with 454,700 shares done. The stock had earlier risen as much as RM1.21 to RM7.71.

At 10am, the stock was traded at RM7.65.

Yesterday, JT International said it had received a take-over offer from its controlling shareholder Japan Tobacco Inc at RM7.80 a share.

JT International said Japan Tobacco which already owned 60.37% of the former, was planning to buy the remaining 39.63% in the company.

Trading of JT International shares was suspended between 4.22pm last Friday (March 28) and 5pm yesterday. Prior to the suspension, the stock was traded at RM6.50.

Today, analysts advise JT International minority shareholders to accept the offer.

In a note today, Hong Leong Investment Bank Bhd analyst Grace Chew said the firm had upgraded its recommendation for JT International shares to "Trading Buy" from "Hold".

The upgrade comes with a higher target price of RM7.80 compared to RM6.62 previously.

"The privatisation offer came as a surprise to us as we were not expecting any such announcement in the near term.

"However, we advise shareholders to take the offer of RM7.80/share as we do not expect share price to appreciate to the offer price’s level over the near term given the challenging environment for the tobacco industry in 2014," Chew said.

TA Securities Holdings Bhd wrote in a note today the offer price of RM7.80 was fair and reasonable.

TA which advised JT International minority shareholders to accept the offer, said its recommendation took into account price-earnings and price-book valuations for JT International.

"Believe offer price is fair and reasonable – accept offer," TA said.