Stock Market Books

Tuesday, May 6, 2008

PK Resources Bhd surged 65% above the offer price

PK Resources Bhd, which is being taken over by several major shareholders and several directors, saw its share price surging 32.9% or 24.5 sen to close at a nine-month high of 99 sen Tuesday.

At 99 sen, it is 39 sen or 65% above the offer price of 60 sen made to the minority shareholders on March 18. The offer became unconditional on April 23 and the closing date of the takeover offer ends today.

Why would people buy shares above 65% above the offer price? Maybe they are not aware that the offer price is 60 sen.

There were 4,100 shares transacted yesterday at prices ranging from 75 sen to 99 sen. Just before market close, stock market data showed there was a bid to buy a block of 5,000 shares at 71.5 sen while the selling price for a block of 1,900 shares at 99 sen.

Akarmas Sdn Bhd, Ragan Jaya Sdn Bhd and Pristine Acres Sdn Bhd held a combined 40.91% stake when they launched the takeover. PK Resources executive chairman Tan Sri Dr Gan Kong Seng, managing director Gan Eng Hong and executive director Datuk Gan Kong Hiok are also involved in the takeover.

The acquisition of the remaining 54.02% or 61.6 million shares at 60 sen each would cost RM36.96mil.

If you were to buy 50,000 shares at the price of 0.64 on April 9 and sold them at 0.99 on May 6, 2008, you would have made RM 16,895.40 within 27 days.

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