BRC Asia shares up on general offer from Esteel

Singapore

SHARES of mainboard-listed steel mesh maker BRC Asia closed five Singapore cents or 5.8 per cent up to 91 Singapore cents on Monday, on news of a general offer for its shares.

It was also actively traded with some 7.33 million shares changing hands by the end of the trading day.

Last Friday, Esteel Enterprise announced its mandatory general offer for shares that it does not already own in BRC Asia at 92.5 Singapore cents a share.

This offer comes on the back of its acquisition of a 43.77 per cent stake in BRC Asia from Lingco Marine, Lingco Holdings, Seah Kiin Peng, Sin Teck Guan Private Limited and Lim Siak Meng last Friday.

HG Metal Manufacturing, a mainboard-listed steel distributor which holds about 22.62 per cent of BRC Asia, has also signed a conditional agreement to accept the offer for its entire share, subject to shareholders' approval.

Once this goes through, the offer will become unconditional, the deal arranger ABN Amro NV (Singapore Branch) said.

In a bid to expand its core business of trading of steel products, HG Metal acquired BRC Asia shares as a strategic investment in August 2008.

It cited challenging business prospects ahead within the construction industry for its decision to dispose its stake.

Usually thinly traded, HG shares closed flat at S$0.58 on about 3.79 million shares traded on Monday.

Earlier in May, activist investment fund Quarz Capital Asia published an open letter, saying that HG should consider selling its stake in BRC Asia and return money to HG's shareholders.

BRC Asia said that it will appoint an independent financial adviser to advise its independent directors.