Hong Leong Group, owned by billionaire Quek Leng Chan, is thinking about selling its majority stake in Southern Steel. The proposed sale could value the company between $100 million and $200 million, significantly higher than its current market capitalization of $89 million.
Major Sale on the Horizon
News broke recently that Hong Leong Group, led by billionaire Quek Leng Chan, is contemplating the sale of its majority stake in Southern Steel Bhd. This decision caused the company's shares to soar, setting a new record.
According to insiders, the deal could give Southern Steel a valuation between $100 million and $200 million. This is a substantial amount, especially when compared to the company's current market capitalization of about $89 million. Post-announcement, the shares of Southern Steel spiked by an extraordinary 30%, later stabilizing at 27% higher than the pre-announcement value.
Hong Leong Group and its financial advisers have initiated talks with various companies in the steel industry, as well as financial investors. This has been done to gauge the level of interest in the sale, and whether the valuation aligns with market expectations.
Southern Steel was founded in 1963 and began production at its galvanized sheet plant in Penang two years later. The company was listed on the Bursa Malaysia in 1993. Hong Leong became its largest shareholder after buying shares from other investors, including NatSteel.
Hong Leong Group holds a 70% stake in Southern Steel. This massive stake is what's currently under consideration for sale. However, insiders say that the conglomerate could still decide to hold onto it.
Neither Hong Leong Group nor Southern Steel has made any public comments regarding this potential sale. This has led to much speculation among investors and market watchers.
The possible sale of Southern Steel by Hong Leong Group has the market buzzing. If it goes through, the deal could drastically change the valuation and standing of Southern Steel in the industry. For now, all eyes are on Hong Leong's next move.