Biosensor International -
Price (18 Feb 14 , S$) 1.00
TP (prev. TP S$) 1.00 (1.00)
News on potential acquisition by Citic PE, a stronger signal of privatisation
■ Biosensor's stock jumped by 17.2% from S$0.87 to S$1.02 within 15 minutes during lunch-period trading. Right after it, Bloomberg News reported that Citic Private Equity Funds Management Co. is considering buying full control of medical device-maker, Biosensors International Group Ltd., according to two people with knowledge of the deliberations.
The stock halted trading in the afternoon and it is unclear when the trading will resume.
■ Following our note, NEUTRAL rating for the short-term earnings weakness; but going private could be a viable option, of 13 February 2014, we believe that this news is a stronger signal that the company is likely to go private in the near term.
■ Biosensors has been buying back shares since Nov-12. In the current programme it has purchased 60.2 mn shares at S$0.83- S$1.20/share. The chairman also exercised his employee share option in late July to purchase 8.6 mn shares.
■ Despite the short-term earnings weakness, the privatisation seems a free option with potential upside, in our view.
Publish date: 19/02/14