Singapore “Flyer” Of The Week: Innopac Holdings

InnoPac LogoRarely is failure in the stock market rewarded with a rise in the share price. But in the case of Innopac Holdings (SGX; I26), its failure to buy Australian diamond miner Merlin was cheered with a 32% jump in the price of its shares to S$0.152. It is our Singapore “Flyer” of the week.

Earlier this week, Innopac told investors that it had ditched plans to acquire the Northern Territory diamond miner. The company said it failed to capture at least 90% of the outstanding shares by the close of the offer.

In its offer document to buy Merlin, Innopac had stipulated that it needed acceptance by at least 90% of all the Merlin shares. It received just 73%. Additionally, it needed Merlin Convertible Notes to be converted into Merlin shares. At the closing date, the notes remained unconverted.

Innopac, which is valued at S$437m, has also chosen not to raise its offer price for Merlin. Instead it announced that it would continue to “assess and pursue strategic investments and growth opportunities going forward”.

And so ends Innopac’s dream of being a Singapore-listed diamond miner – or so it might seem. Joseph Gutnick, chairman of Merlin, now owns 13% of Innopac that he bought through two separate tranches in February this year. As a significant shareholder in Innopac and a miner by profession, the story of Innopac’s ambition to dig holes in Australia may not be over.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.


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