RI takeover boosts Singapore's Econ<\/p>\n
SINGAPORE (Reuter): A takeover bid by Indonesian businessmen
\nsent shares in a small Singapore construction company soaring
\nyesterday, focusing attention on a recent surge of Jakarta
\ninvestment into the island's stock market.<\/p>\n
Econ International Ltd shares rocketed almost 50 percent to an
\nall-time high of Singapore $2.05 (US$1.46) after news that
\nIndonesian-owned Yenville Pte Ltd had offered S$1.46 per share
\nfor the company on Wednesday evening.<\/p>\n
More than 72 million shares, including 60 million off-market
\nblock deals, were traded in Econ in the first two hours alone --
\nalmost half the entire volume on the Stock Exchange of Singapore.<\/p>\n
Before the bid was announced, Yenville owned 46.71 percent of
\nEcon's shares and 33.69 percent of the company's warrants. It is
\ntoo early to tell how many shareholders will respond to the
\noffer.<\/p>\n
The bid is the latest in a long-line of high-profile takeovers
\nby Indonesian entrepreneurs who are moving into Singapore to take
\nadvantage of its strong currency and low interest rates to expand
\ntheir businesses.<\/p>\n
\"Econ may be a good target for the Indonesians,\" said William
\nCliffe, the manager of institutional sales at DBS Securities. \"It
\nis a specialist construction company with good margins, but it is
\nsmall and will probably be a good base for expansion.\"<\/p>\n
Control<\/p>\n
Like many other recent targets of Indonesian investors, Econ
\nis fairly inexpensive to control.<\/p>\n
Floated in October, 1994, for just 90 cents (64 U.S. cents) a
\nshare, its 131 million shares were worth just S$1.28 (91 U.S.
\ncents) each until last week, when trading was suspended on August
\n17. At that price a controlling half-share would cost under S$85
\nmillion ($60.70 million).<\/p>\n
Its business, engineering and piling, is very similar to
\nanother recent acquisition, construction company L&M, which was
\nbought two weeks ago by a group led by Indonesian President
\nSoeharto's son Bambang Trihadmodjo.<\/p>\n
Econ also has subsidiaries in several other Asian growth
\neconomies, including Vietnam and China.<\/p>\n
Yenville is owned, via a holding company, by a group of
\nIndonesians including Andry and Wilson Pribadi, related to Henry
\nPribadi, who recently bought a large stake in property group
\nAmcol Holdings.<\/p>\n
Analysts say small Singapore firms are an attractive target
\nfor Indonesian investors who want a secure foreign base nearby.<\/p>\n
\"Singapore is next-door. It is well-managed and there are a
\nlarge number of small companies on hand available to take over,\"
\nCliffe said. \"And interest rates here are fairly low. Much of the
\nmoney used for the purchases is not Indonesian, but borrowed
\nlocally at attractive interest rates.\"<\/p>\n
Dealers said this factor was probably responsible for the huge
\nrise in Econ's share price, well above the offer level, after
\nnews of the bid was announced.<\/p>\n
By the midday close on Thursday, Econ shares stood at S$1.83
\n($1.31), up 40 cents (26 cents). Warrants in the company were at
\nS$1.25 (89 cents), up 41 cents (27 cents).<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ri-takeover-boosts-singapores-econ-1447893297",
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