Mandarin Oriental shares surge 36.3% on privatisation offer, Jardine Matheson up 7.5%

[SINGAPORE] Shares of hotel chain Mandarin Oriental surged as much as 36.7 per cent on Tuesday (Oct 21) on the back of a privatisation offer from controlling shareholder Jardine Matheson , whose shares also jumped.

The investment company said on Friday that it is moving to take Mandarin Oriental private in a recommended cash takeover valued at US$3.35 per share, bringing the hotel group’s total valuation to about US$4.2 billion.

The hotel chain’s shares jumped to as high as US$3.28 in the first two minutes of trading on Tuesday, having closed at US$2.40 on Friday. They were trading at US$3.27 at the midday break, up 36.3 per cent.

Shares of Jardine Matheson rose about 7.5 per cent to US$65.70 as at the midday break, having closed at US$61.13 on Friday.

The privatisation offer represents a 62.6 per cent, 65.8 per cent and 70.9 per cent premium over Mandarin Oriental’s volume-weighted average price for the one-month, three-month and six-month period, respectively.

Jardine Matheson’s investment holding company, Jardine Strategic, will acquire the remaining 11.96 per cent of Mandarin Oriental shares it does not already own.