CEC International Holdings (0759.HK)

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759 Store owner’s shares double on hopes death of founding chairman Lam Wai-chun may lead to restructuring
Executive director Tang Fung-kwan to take over as chairwoman of CEC International after the death of Coils Lam Wai-chun on Saturday

Enoch Yiu
PUBLISHED : Monday, 20 August, 2018, 1:01pm
UPDATED : Monday, 20 August, 2018, 5:41pm

CEC International Holdings, which owns the popular 759 Store in Hong Kong, saw its share price more than double on Monday morning as brokers speculated there may be a restructuring of the company after its founding chairman died at the weekend.

The share price reached a 21-month high of HK$1.04 before the lunch break on Monday, up by 124 per cent from Friday’s close of 46.5 HK cents. It closed on Monday at 89 HK cents, up 91 per cent from Friday close.

The rise followed the sudden announcement on Sunday night that Coils Lam Wai-chun, the founding chairman of the company and its flagship 759 Store, had died at the age of 60 on Saturday at Hong Kong Sanatorium & Hospital.

“The passing away of the founding chairman is sad news. However, it also gives hope to investors that it may pave the way for a major restructuring, or even merger and acquisition opportunities. This has led buyers to rush to bet on the stock on Monday,” said Jeffrey Chan Lap-tak, founding partner of Oriental Patron Financial Group.

“The 759 Store in fact is very popular and has a leading market position among snack retailers. Its [financial] results were not good in recent years, mainly due to an overexpansion of the number of stores a few years ago. But the reduction of stores in the past two years has already helped the company get back on track. It may well be a target of acquisition,” he said.

However, Chan said 759 Store, like many small and medium-sized companies, relied heavily on the leadership of its founder. Lam and his wife Law Ching-yee own 70.89 per cent of CEC International, according to stock exchange data.

“Now the founder has died. We will need to wait and see if the new management can lead the business forwards,” Chan said.

CEC International did not disclose the cause of Lam’s death. A source close to Lam told the South China Morning Post that the founding chairman has suffered from diabetes for years.

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759 Store’s new boss Tang Fung-kwan quashes takeover rumours, wants snack food chain to stay the course
Tang Fung-kwan, the new chairwoman of CEC International, says she has the firm backing of the founding chairman’s family

Enoch Yiu
PUBLISHED : Thursday, 30 August, 2018, 3:34pm
UPDATED : Thursday, 30 August, 2018, 4:28pm

The newly appointed chairwoman of CEC International Holdings, which owns the popular 759 Store in Hong Kong, said on Thursday that there are no plans to sell and she would press on with the late founding chairman’s efforts to turn around the loss-making retail chain.

CEC’s share price had more than doubled to a 21-month high at HK$1.04 on August 20 as brokers speculated the company might become a takeover target following the death of founding chairman Coils Lam Wai-chun the previous day.

However, executive director Ida Tang Fung-kwan, 48, who was named as chairwoman of CEC and 759 Store on August 20, quashed those rumours.

“As I told the Hong Kong exchange last week, there are no takeover negotiations whatsoever,” Tang told the South China Morning Post in an exclusive interview at CEC’s offices in Kwun Tong, surrounded by photos and trophies won by Lam. “We are not under any pressure to raise funds and there is absolutely no plan to sell CEC or 759 Store.”

Lam, his wife and three children – two daughters and a son – own 70.89 per cent of the company, Tang said, adding that his death will not affect their shareholding, which is held in a family trust.

“Mr Lam’s family are now the majority shareholders and they fully support me and the management to continue his mission to turnaround the company,” she said.

Lam’s son Billy, 27, who has been with the company for a few years now is being groomed to take over the reins, she added.

More details in https://www.scmp.com/business/companies/...-junk-food