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Investing.com-- Shares of Dongfeng Motor Group (HK:0489) surged nearly 70% to an eight-year high on Monday after its state-owned parent, Dongfeng Motor Corp, announced plans to take the company private.
The proposed deal includes HK$6.68 per share in cash and a stake in its electric vehicle unit, Voyah, bringing the total value to HK$10.85 per share. This represents a 12% premium over the stock’s last trading price before the announcement.
Hong Kong-listed shares of the company climbed as much as 69% to HK$10.10, their highest level since October 2017.
The privatization, valued at HK$55.13 billion ($7.06 billion), is aimed at streamlining operations amid consolidation in China’s automotive industry.
Dongfeng plans to separately list Voyah in Hong Kong to bolster its position in the electric vehicle market.
The stock’s surge helped lift the Hang Seng Automotive Index by 1.8%, while the broader Hang Seng Index jumped 2% amid a broad-based rally.