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Shares in Australian food company George Weston Foods jumped 12.3 per cent on Thursday as investors bet that Associated British Foods will soon privatise its Australian subsidiary, reports Dow Jones.
George Weston said in a brief statement that its board "is considering a proposal to undertake a selective reduction of capital, under which minority shareholders would receive a combination of a franked dividend and a capital payment."
A George Weston spokesman said he could not elaborate on the statement.
According to the Dow Jones news story, investors, however, quickly interpreted the statement as confirmation of market talk over the last year that Associated British will attempt to buy the 19 per cent of George Weston that it does not already own.
The stock ended 70 cents higher at A$6.40, giving the company a market capitalisation of A$823 million (€487m).
