CWT Limited (CWT) yesterday announced that the negotiations between its controlling shareholder, C&P Holdings (C&P), and HNA Group (HNA) in relation to a potential transaction with respect to HNA acquiring C&P’s 31.9% stake in CWT are still ongoing. The purchase of C&P’s entire 31.9% stake in CWT will trigger a mandatory general offer for all the remaining shares of CWT, and may lead to a potential privatization of CWT.

We previously highlighted that CWT’s share price spiked to as high as S$2.37 when the news of C&P looking to divest its stake in CWT was first reported back in Jul-15. However, note that there is no assurance that such negotiations will result in any definitive agreement or transaction.

Given the lack of concrete details, it is best to wait for official announcement on the terms of any potential deal, if it does materialize. We currently have a HOLD rating on CWT with fair value estimate of S$1.95.

Source: OCBC Research - 17 Jun 2016