Stocks to watch: Glenealy, Lingui, Golden Frontier, Oylmpia

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So many take over ...

Written by Joseph Chin of
Saturday, 28 January 2012 16:35

KUALA LUMPUR (Jan 28): Three companies -- Glenealy PLANTATION []s (Malaya) Bhd, Lingui Developments Bhd and GOLDEN FRONTIER BHD [] – which face takeovers by their major shareholders are among the stocks to watch in the week ahead, starting Jan 30.

Market sentiment could be given a mild boost after Euro zone finance officials voiced optimism on Friday that a deal to avert a disorderly Greek default was imminent as Reuters reported that key building blocks to resolve Europe's sovereign debt crisis are gradually fitting into place.

On Wall Street, stocks trimmed losses to end little changed on Friday, as investors saw dips in the market as an opportunity to buy into what has been a strong first month of 2012.

The Dow Jones industrial average fell 74.17 points, or 0.58%, at 12,660.46. The Standard & Poor's 500 Index was down 2.11 points, or 0.16%, at 1,316.32. The Nasdaq Composite Index was up 11.27 points, or 0.40%, at 2,816.55.

For the week, the Dow fell 0.5%, the S&P was up 0.1% and the Nasdaq rose 1.1%.

Friday's losses were limited as U.S. Federal Reserve statements this week and economic data kept investors alert for the possibility of another round of monetary stimulus known as quantitative easing, or QE3, Reuters reprted.

At Bursa Malaysia, Glenealy and Lingui could see some trading interest after its major shareholder Samling Strategic Corporation Sdn Bhd (SCC) announced plans to take them private.

SCC offered RM7.50 a share for the plantation-based Glenealy shares, which is a premium of 95 sen or 14.5% above the pre-suspension price of RM6.55. SCC also offered RM1.63 for the timber-based Lingui shares, which was 27 sen or 19.8% above the pre-suspension price of RM1.36.

Golden Frontier’s main shareholder Frontier Equity Sdn Bhd, which owns 41.26% , has served a notice of conditional take-over offer on the company, offering RM1.50 a share for the remaining stake it does not own.

The RM1.50 offer price is a premium of 21.95% or 27 sen over the five-day volume weighted average price (VWAP) of the shares up to Jan 20. The offer price is 27.12% or 32 sen over the one-month VWAP of RM1.18. The pre-suspension price was RM1.21.

Meanwhile, Malaysian Rating Corporation Bhd (MARC) downgraded the rating of OLYMPIA INDUSTRIES BHD []’s outstanding RM49.73 million nominal value redeemable unsecured loan stocks (RULS) loan stocks to B+ from BB-.

However, MARC concurrently revised the rating outlook of these RULS to stable from negative on expectations that Olympia will manage timely disposal of assets to meet its future debt obligations.

The Edge weekly reports that steel players are not benefiting from the recent Thai floods. It said that the optimism proved unfounded as demand fails to materialise due to excess capacity and delays in implementation of big projects.