Portek (DMG)

ICTSI mops up shares in Portek

The news: According to BT, INTERNATIONAL Container Terminal Services Inc (ICTSI), which launched an offer to take over Portek International, has raised its stake to 16.93 per cent through open-market purchases. ICTSI bought 18.195 million shares on Thursday at $1.19-1.20 per share. The offeror held a stake of 4.82 per cent when it first launched its offer last Wednesday. Portek closed trading one cent lower at $1.19 last Friday. According to the media, Portek's founder chairman Larry Lam, who holds 41.96 per cent of the company, is 'still studying' the offer.

Our thoughts: This general offer differs slightly from the script in recent takeovers, where the acquirer secures the support of the major shareholder prior to the launch of the takeover. We believe Larry Lam is leaving the door open to other suitors (and there should be more than one interested parties) willing to come up with a higher offer. After all, prospect for the company is shaping up nicely with its North African ports enjoying strong growth in throughput and profitability while the engineering arm has built up a robust orderbook. ICTSI is strengthening its hand by mopping up as much shares as it can in the market. Time will tell whether there will be new bidders coming in and it would be worthwhile to wait for the recommendations from the independent financial advisors.