Mandarin Oriental shares surge 36.7% on privatisation offer, Jardine Matheson up 7%

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

It said on Friday that Mandarin Oriental is being taken 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 having closed at US$2.4 on Friday (Oct 17). Shares of Jardine Matheson also jumped about 7 per cent to US$65.37 on Tuesday morning.

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 wholly owned subsidiary, Bidco, will acquire the remaining 11.96 per cent of Mandarin Oriental shares it does not already own.