Dec. 20 (Bloomberg) -- SCMP Group Ltd., publisher of the South China Morning Post newspaper, rose the most in more than four years in Hong Kong after receiving a HK$2.37 billion ($304 million) buyout offer from controlling stockholder Robert Kuok.

The shares gained as much as 8.8 percent, the biggest increase since Sep. 24, 2003, to HK$2.72 at the end of trading. Kerry Group, owned by billionaire Kuok, offered HK$2.75 a share to buy the 55.1 percent of the stock that it doesn't already control, 10 percent more than the last closing price before the bid.

The publisher's stock slumped to record lows last month on concern a government decision to stop requiring companies to publish corporate announcements in newspapers will hurt sales. SCMP profit doubled in the past five years as Hong Kong's economic expansion lifted advertising revenue.

``SCMP's earnings may come under further pressure because of the loss of the revenue from printing company notices,'' said Mavis Hui of DBS Vickers Ltd. in Hong Kong, who rates SCMP shares ``hold.''

The shares, which plunged to a record HK$2.19 on Nov. 28, had fallen 15 percent this year before today, compared with a 35 percent increase in Hong Kong's benchmark Hang Seng Index.

``SCMP is currently undervalued and it offers Kerry Group very good reasons to privatize,'' BNP Paribas SA said in a note to clients today. The investment bank previously estimated the parent company will price its buyout offer at HK$3.11 per share.

General Offer

Hong Kong exchange rules require shareholders who own between 30 percent and 50 percent of a listed company to make a general offer for the rest of the stock if they increase holdings by 2 percent or more.

``Minority shareholders may not deem it a sufficiently attractive offer,'' DBS Vickers's Hui said. The parent ``probably isn't serious about privatizing'' SCMP, she said.

Kuok, 84, bought a controlling stake in SCMP from media tycoon Rupert Murdoch in 1993. The company's sales declined to HK$1.2 billion last year from HK$2.4 billion in 1997, when the U.K. handed Hong Kong back to China after controlling it for more than 150 years.

Kuok was rated by Forbes Inc. this year as Malaysia's richest man, worth $7.6 billion. He also has interests in property and sugar manufacturing.

The South China Morning Post's audited circulation fell to 102,013 in the second half of 2006, from 104,415 in the first half, according to its annual report published in April. That is just over a quarter of the sales of Chinese-language Oriental Daily News, Hong Kong's best-selling newspaper with a daily circulation of 400,000, according to BNP Paribas.

Economic Growth

Economic growth in Hong Kong, which has about 6.98 million people, may slow to 5.8 percent this year from 6.8 percent in 2006, the World Bank said. Gross domestic product has expanded more than 5 percent annually since 2004.

The SCMP is the only English-language newspaper in Hong Kong with a cover price. Its rival, the Standard, dropped the charge in September to try to boost circulation after the government stopped requiring companies to publish announcements.

To contact the reporters on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net; Hanny Wan in Hong Kong at hwan3@bloomberg.net

Last Updated: December 20, 2007 03:45 EST