The S&P / ASX 200 index rose 1 per cent last week, but four stocks blitzed the market by rising more than 10 per cent. Let’s take a look at each of them and the reasons why they jumped.
First up is Thakral Holdings Limited (ASX: THG), whose shares rose 20.5 cents to 74.5 cents , or 27.5 per cent, after Canadian private equity giant Brookfield Asset Management announced that it intends to make a 70 cent per share all-cash takeover offer for Thakral.
Given Thakral’s net tangible assets per share is 96 cents, the 70 cent takeover is likely to be rejected by the Thakral board. Thakral owns $1.25 billion of property including several Sofitel and Novotel hotels and the Menzies Hotel in Sydney.
Investors also appear to be expecting a higher bid, given the shares are trading at a premium to the offer price.
The takeover offer came after the Thakral family defaulted on a loan owed to Brookfield, secured against 39 per cent of the listed Thakral holdings.
Return to form
Second cab off the rank is Australian Pharmaceutical Industries Limited (ASX: API ). API’s shares rose 8 cents to 39 cents, or 20.5 per cent. I recently covered the reasons why API rose in this article, with a warning for long term investors to stay away as the risks far outweigh the rewards of any short term potential rewards.
Investors cheer good news
Next is Universal BioSensors Limited (ASX: UBI). UBI shares rose 14 cents to 80 cents, a rise by 17.5 per cent, apparently in response to the company’s commentary of the 1st quarter of 2012, which included an announcement that LifeScan has launched OneTouch Verio in the world’s largest market, the United States. OneTouch Verio is a blood glucose testing system, designed by UBI and licenced to Johnson & Johnson (NYSE: JNJ). LifeScan is a JNJ company. It appears that the market expects big things from Universal Biosensors.
Implied valuation hike
And last but not least, Linc Energy Ltd (ASX: LNC) rose 14.5 cents to $1.215, a rise of 11.9 per cent. Linc is a diversified energy company with interests in coal, oil and gas. The company is focused on underground coal gasification and gas to liquids processing, although it has yet to establish a commercial project based on these technologies.
The shares rose last week after the company announced that Golden Concord Holdings Limited had taken a $120m shareholding in Linc in return for 5 per cent of the company’s issued share capital. This gave Linc Energy an implied valuation of approximately A$2.3 billion, a large difference over the company’s current market cap of just A$613m.
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Motley Fool contributor Mike King doesn’t own shares in any of the companies mentioned. The Motley Fool’s purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool’s disclosure policy