NOL: The national liner steamed 7% forward amid high volume in morning trades after The Wall Street Journal reported that Temasek Holdings is putting its 66.9% stake in NOL for sale, citing it had been in talks with a prospective buyer. However, no deal has yet been reached due largely to pricing.
Post divestment of APL Logistics in May, struggling NOL has become a pure container line, spurring market speculation of a sale of the entire company to other profitable rivals capable of turning its fortunes around. At the current price, NOL has a market cap of $2.5b, compared to regional peers OOIL ($4.4b), CSCL ($14.8b) and China Cosco ($17.9b).
Previously, NOL was touted to have been in merger discussions with Hapag-Lloyd and OOOIL, which failed to materialise into any significant agreement.
In response, management declared that it will consider its options to maximize shareholder value and has not made any decision nor entered into any agreement for a potential sale, and is maintaining its current focus on returning its core liner business sustainable growth and profitability.
Valuation for NOL is undemanding at 0.7x P/B (post-divestment), well below regional peers. The street has 7 Buy, 12 Hold, and 1 Sell ratings with a consensus TP of $1.08.