Fosun Tourism and Culture surged as much as 83% in Hong Kong to hit a high of HK$7.33 at one point after its parent Fosun International announced a plan to privatize the subsidiary at a 95% premium.
Fosun International said that the board of directors intends to repurchase shares of Fosun Tourism & Culture at a price of HK$7.8 per share, representing about a 95% premium to the stock’s closing price before trading suspension.
On completion, Fosun International and Fosun Holdings will hold about 98.44% and 1.56% stakes in Fosun Tourism & Culture, respectively and the listing status of Fosun Tourism & Culture on the Hong Kong Stock Exchange will be canceled, it said.
The listing status of Fosun Tourism & Culture no longer provides a meaningful financing channel and causes additional costs on the company, Fosun Internationa said.
Following the delisting, administrative resources related to maintaining the listing status are expected to be significantly reduced and Fosun International will be able to allocate business resources more effectively, enabling Fosun Tourism & Culture to execute its long-term strategies and achieve sustainable growth, it added.
