Takeover bid spurs NOL shares

Takeover bid spurs NOL shares

Shares in Neptune Orient Lines surged Wednesday on speculation that Temasek Holdings, Singapore's state-owned investment arm, will increase a 2.8 billion Singapore dollars (US$ $1.6 billion) takeover bid for the world's sixth-largest shipping line.

NOL's shares rose 7.4 percent to 2.90 dollars, higher than Temasek's bid of 2.80 dollars a share. Temasek, seeking more than half the company, raised its stake to 30.14 percent by buying shares Tuesday, triggering a mandatory takeover that will be its biggest acquisition.

Temasek, which manages 100 billion dollars in assets, is looking for investments that will match its average 16 percent annual return over the past 30 years. Shares of NOL, which operates the world's sixth-largest container fleet, have risen 34 percent this year, lifted by a surge in exports to China.

Temasek said it will continue to buy NOL's shares in the market at the offer price.

NOL did not comment on the offer.

NOL has been linked to the potential acquisition of several shipping lines, forcing the company to issue a denial in February when speculation shaved as much as 7 percent off its share price. Later that month, Chief Executive David Lim said the shipping group would consider buying another container line if "it's a good strategic fit" that enhanced shareholder value, competitiveness and customer service.

In May, Lim said NOL would rather buy back its own stock, then priced at 1.95 dollars, than acquire rivals because they were more expensive.

The company had earlier considered buying P&O Nedlloyd Container Line, the world's third-largest container shipping line by capacity, but dismissed the plan after consecutive yearly losses in 2001 and 2002.