S'pore abuzz over Temasek's NOL bid<\/p>\n
Jake Lloyd-Smith, Associated Press, Singapore<\/p>\n
The Singapore government's powerful investment arm sent waves
\nthrough the city-state's stock market on Wednesday after it made
\na surprise S$2.82 billion (US$1.6 billion) cash bid for the
\nworld's seventh largest shipping group.<\/p>\n
The offer by Temasek Holdings, revealed late on Tuesday,
\ntriggered both a surge in the share price for Neptune Orient
\nLines, or NOL, and a debate among analysts about Temasek's
\nmotives for the swoop.<\/p>\n
The opaque investment group, a unit of the Finance Ministry,
\nhas been concentrating on acquisitions outside its tiny home
\nmarket around the region in recent months, while trimming stakes
\nin some local companies. The bid for NOL appears to run counter
\nto this trend.<\/p>\n
Temasek on Tuesday raised its stake in NOL from 27 percent to
\n30.14 percent. Under Singapore's takeover code, a shareholder
\nthat buys more than 30 percent of a listed company is required to
\nmake an offer for all of its shares.<\/p>\n
Temasek said it was offering to buy all NOL's stock at S$2.80
\napiece.<\/p>\n
"We were interested to increase our shareholding above 30
\npercent," Margaret Lui, Temasek's Managing Director of Strategic
\nDevelopment said in a statement.<\/p>\n
The bid "is an all cash, firm offer, conditional upon us
\nreceiving" at least half the shares, Lui added.<\/p>\n
The company's shares closed at S$2.70 on Tuesday, spiked up to
\na high of S$2.95 in early trade on Wednesday, and then eased
\nslightly to trade at S$2.88 at midday.<\/p>\n
Temasek - headed Ho Ching, wife of leader-to-be Lee Hsien
\nLoong - is the most powerful corporate player in the wealthy
\ncity-state, and its stable of well-known companies was used to
\ndrive Singapore's industrialization in the 1970s.<\/p>\n
Today, it maintains extensive holdings in Singapore
\nTelecommunications, the phone group; DBS Group, the region's
\nlargest bank; Singapore Airlines, the country's flag-carrier and
\nmany others.<\/p>\n
Temasek doesn't publish comprehensive annual accounts covering
\nall its investments, although many of its individual listed
\ncompanies do detail their performances.<\/p>\n
OCBC Securities said in a note to clients that Temasek's
\nrationale for the offer is "unclear at this stage," highlighting
\nthe confusion that the move is causing.<\/p>\n
"We consider ourselves an Asian investment company and we
\nactively manage our investments," a Temasek spokesman was quoted
\nas saying on Wednesday in the Straits Times newspaper.<\/p>\n
NOL made headlines of its own last week, reporting its second-
\nquarter net profit rose almost threefold to $186 million on the
\nback of higher demand and better freight rates.<\/p>\n
The rosy result for the quarter to June 25 comes as the global
\neconomy has been picking up steam, and it beat analysts' average
\nforecasts for a profit of $174 million.<\/p>\n
NOL charges its customers in U.S. dollars and, like many
\nplayers in the industry, reports its results in that currency.<\/p>",
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