Hot stock: SATS hits 2.5-month low following news of potential acquisition

SATS shares dropped to a 2.5-month low on Thursday (Sep 22) morning, after the in-flight caterer and ground handler disclosed on Wednesday that it is in talks to acquire air cargo handler Worldwide Flight Services.

The counter dropped to a low of S$3.87 as at 10.33 am on the day, down 5.1 per cent or S$0.21 with 4.8 million shares changing hands. The last time the counter closed near this level was on Jul 5. SATS shares were down 5.1 per cent to S$3.88 at market close.

But the deal, Citi analysts said, could be “strategically correct” to SATS, given the limited overlap in the geographies they serve, which would pave the way for the Singapore-listed player to scale up.