SCMP Halts as Publisher Jumps Most in 15 Years: Hong Kong MoverLulu Yilun Chen
SCMP Group Ltd., the publisher of the South China Morning Post, halted its stock from trading in Hong Kong after it jumped the most in more than 15 years.
The company plans to make “an announcement in relation to unusual price and trading movements and inside information,” it said in a filing today, without elaboration. Jennifer Shay, a spokeswoman for the Hong Kong-based publisher, didn’t respond to an e-mail and phone call for response.
SCMP, which produces Hong Kong’s only paid-for English-language daily newspaper, surged as much as 31 percent amid speculation its largest shareholder, billionaire Robert Kuok’s Kerry Media Ltd., could be planning to take the company private or sell it. The publisher is in danger of being delisted later this month because the proportion of shares held by minority investors may drop below a minimum requirement.
“The run-up this morning in the stock is presumably some leakage about some alternative they might be negotiating with their largest shareholders,” said David Webb, an independent financial commentator based in Hong Kong and former stock exchange director. “SCMP does still make money.”
The publisher had net income of HK$184 million ($24 million) in the first half of last year, on sales of HK$458 million. The newspaper, first published in 1903, has a weekday circulation of 108,047, the company said in a marketing brochure on its website, citing the Hong Kong Audit Bureau of Circulations Ltd.
SCMP was up 23 percent at HK$2.15, headed for the biggest advance since October 1997, when it was halted. It traded for as much as HK$2.29 earlier today. The publisher has a market value of about $433 million, according to data compiled by Bloomberg.
The company could be delisted as Kerry Media may be obligated to buy a 14 percent stake owned by banks under options due to expire Feb. 27, according to a Jan. 17 statement. That would cut the publisher’s free float to around 11 percent from about 25 percent, based on numbers in the statement.
Kuok, 89, bought a controlling stake in SCMP from media tycoon Rupert Murdoch in 1993. The company’s sales declined to HK$946 million in 2011 from HK$2.4 billion in 1997, as readers turned to the Internet and other media for news.
Kuok is ranked 38th in the Bloomberg Billionaires Index with a net worth of $18.8 billion. He also has interests in property, hotels, palm oil and shipping.
The SCMP’s local rival, the Standard, stopped charging readers in 2007 to boost circulation after the government ended a requirement for companies to publish stock-exchange announcements.