Mandarin Oriental shares surge 36.3% on privatisation offer, Jardine Matheson up 7.8%

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 Oct 17 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 as high as US$3.28 in the first two minutes of trading on Tuesday. The counter eventually closed at US$3.27, up 36.3 per cent or US$0.87 from its Friday closing price of US$2.40.

Shares of Jardine Matheson rose 7.8 per cent or US$4.77 on Tuesday to close at US$65.90.

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.