Reuters: Hot Stocks: UPDATE 1-Shareholder stake sale spooks ComfortDelGro investors

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UPDATE 1-Shareholder stake sale spooks ComfortDelGro investors May 23rd 2013, 05:24 Thu May 23, 2013 1:24am EDT * Singapore Labour Foundation sells two-thirds of stake * ComfortDelGro share price drops as much as 14 pct * Analysts see little impact on company operations (Adds details of share sale) SINGAPORE, May 23 (Reuters) - ComfortDelGro Corp Ltd's biggest shareholder sold two-thirds of its holding, cashing in on the stock's march to six-year highs this week but spooking other investors who pushed the shares in the Singapore taxi and bus operator to a record daily decline. The Singapore Labour Foundation raised S$330 million ($261 million), selling shares at S$1.94 per share, the low end of its indicated range. Its stake dropped to around 4 percent from 11.9 percent, according to Thomson Reuters data. ComfortDelGro's shares fell almost 14 percent to S$1.885 on the news, shrinking its market value by over $500 million but analysts saw little reason for concern. "Nothing has changed overnight. The management is good, the balance sheet is strong, there is potential accretion from M&A, etc - all those remain intact," said Nomura analyst Wen Jie Chan. "Our view is that we suggest investors focus on these factors and judge the company by its fundamentals, not the noise generated by this transaction." The indicated range for the deal had been S$1.94-S$2.03 per share. UBS was the sole bookrunner. ComfortDelGro and the Singapore Labour Foundation declined to comment on the transaction. Capital Research Global Investors will become the company's biggest investor with a stake of 6.4 percent, Reuters data shows. ComfortDelGro, which earns about 60 percent of its revenue from Singapore, has turned to overseas acquisitions to boost growth and offset a tough operating environment in its home market. Last year, its revenues rose 3.9 percent to a record S$3.55 billion, while net profit increased 5.6 percent. The near 14 percent decline in its shares comes after they hit a six-year high this week. The stock is now up 8.5 percent so far this year, in line with the benchmark index. Out of 16 analysts tracking ComfortDelgro, 5 have a buy or strong buy rating, 7 have a hold and 4 have a sell or strong sell recommendation. ($1 = 1.2649 Singapore dollars) (Reporting by Anshuman Daga, Kevin Lim and Rujun Shen; Additional reporting by Daniel Stanton; Editing by Edwina Gibbs) Link this Share this Digg this Email Reprints

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