Broadway Ind surges 34% on US$50m offer for its hard disk business

Singapore

SHARES of Broadway Industrial hit a near 3.5-year high on Tuesday after the precision manufacturer announced it received a US$50 million offer for its hard disk business from the largest production outfit of the Seksun group of companies.

The counter hit an intraday high of 16.6 Singapore cents on Tuesday, up 33.8 per cent or 4.2 cents as at 4.40pm. The last time the counter closed near this level was on April 5, 2017.

The stock was also the sixth most traded by volume on the Singapore bourse, with 103.8 million shares changing hands at market close. The counter closed up 33.1 per cent or 4.1 Singapore cents at 16.5 cents on Tuesday.

On Tuesday morning, Broadway Industrial said it received a binding letter of intent (LOI) from Seksun Technology (Suzhou) Co. Under the LOI, which Broadway Industrial received on Monday, the potential buyer plans to acquire substantially all assets used in Broadway Industrial's actuator arm and related parts manufacturing operations.

These are the assets and properties owned by BIGL Technologies (Shenzhen) Co, excluding the land and buildings situated at Pingshan Street in Shenzhen and covered under Shenzhen Title Certificate No 0227103. The target assets also include any mutually agreed properties or assets between the parties.

The proposed US$50 million purchase price is subject to certain assumptions, including assumptions relating to the financial conditions of Broadway Industrial's actuator arm and related parts manufacturing operations, the group said.

Incorporated in China, Seksun Technology (Suzhou) Co's core competencies are in precision metal stamping. The company serves customers from the hard disk drives, consumer electronics, automotive and telecommunication industries.

It falls under the Seksun group of companies - a metal stamping specialist with manufacturing operations in Singapore, Thailand and China.

Prior to its privatisation, Seksun was listed on the Singapore Exchange's (SGX) mainboard. It took on the name Enporis Greenz after selling its assets and business undertakings for S$295.1 million in late-2007. Enporis delisted on Aug 1, 2009, after failing to secure a further extension of time from SGX to acquire a new business.

Broadway Industrial is one of the few remaining Singapore-listed hard disk drive component makers. Others include Cheung Woh Technologies, Santak Holdings and Miyoshi.

Broadway Industrial's largest shareholder is Lau Leok Yee, the widow of former executive chairman Wong Sheung Sze. She holds a total interest of 32.1 per cent in the company, according to the company's annual report.

Non-independent board chairman Lew Syn Pau holds a 9.5 per cent stake.

Before its announcement that it received a non-binding indicative proposal to dispose of its hard disk drive business in May 2020, Broadway Industrial traded at a significant discount to its net asset value of 14.62 cents as at March 31.