A PROPOSED acquisition of shares in Tianjin Zhong Xin Pharmaceutical Group by its controlling shareholder may have been behind the price surge in shares of the company on Thursday.

 

Tianjin Zhong Xin disclosed this on Thursday evening after its share price rose more than 11 per cent on Thursday morning, prompting a query from the Singapore Exchange (SGX).

 

The counter hit an intraday high of US$1.10 before easing slightly to US$1.05, up 11.7 per cent or US$0.11 before the midday break.

 

It continued its upward trajectory in the afternoon, rising US$0.13 or 13.8 per cent to US$1.07 as at 2.41pm, with some 5.3 million shares changing hands. Tianjin Zhong Xin later called for a trading halt.

 

Responding to SGX on Thursday, Tianjin Zhong Xin said that its controlling shareholder, Tianjin Pharmaceutical Holdings, is contemplating an acquisition of shares in the company. However, discussions are ongoing and there is " no assurance that any definitive agreement or transaction will materialise" .

 

As at Sept 28, Tianjin Pharmaceutical Holdings holds a 42.8 per cent interest in Tianjin Zhong Xin.

 

This comes as Tianjin Pharmaceutical Holdings' owner, Tianjin Bohai State-owned Assets Management, is in the process of transferring out 67 per cent of its stake in Tianjin Pharmaceutical Holdings via a public tender for sale, as part of a drive in China to reform the state-owned enterprise.

 

The reform is meant to introduce new investors, which may result in significant changes in the shareholding structure of Tianjin Pharmaceutical Holdings and a change of its actual controller.

 

Otherwise, Tianjin Zhong Xin said, it is not aware of any information not previously announced concerning the company, its subsidiaries or associated companies which might explain the unusual trading activity recently.