Amara Holdings (SGX: AMRA) shares are up another 16% today on the continuation of last week's news about a possible transaction concerning the company. There were significant rises at the end of last week as the news of a potential transaction appeared to leak. Or perhaps that should be “leak”. It's always difficult to tell who is supplying information to the market at times like these.
As of Friday the information known was: “Amara's statement indicated that it had received written notification on Saturday from siblings Albert Teo Hock Chuan and Susan Teo Geok Tin informing the company that they and some family members are currently engaged in confidential discussions with a third party in relation to a possible transaction involving Amara.” Between the two they have around 12% of the outstanding stock. However there is also this: “First Security, a corporate shareholder with a 26.5 per cent stake, count both siblings as shareholders.” We should probably expect that the siblings can swing the vote on that 26% shareholding too.
Amara Holdings share price from SGX
Amara also requested a trading halt before clarification given that the shares were soaring on information arriving on the market. Or, perhaps, gossip about something that might be happening etc.
It's also possible to be somewhat cynical here. Or, possibly given that we're talking about money, appropriately realistic. Which is to wonder where that gossip was coming from which drove the share price up last week. One obvious answer is just that people on the fringes of the talks let slip something and so the news got out. Another is that those involved let it slip. In the sense that “a transaction” probably means selling some or all of the stake. And if the stake rises in value while the talks are ongoing then it may well be possible to gain a higher value for that stake or company.
To claim that that is what happened would be going much too far. We'd suggest that that's what we would do in that situation though.
