Will ASIC do anything about the Bradken Limited price spike?

Will the corporate cop take a closer look at trading in Bradken Limited's (ASX:BKN) shares?

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Published April 2, 2015 2:07 pm AEDT

Mining equipment company Bradken Limited (ASX: BKN) saw its share price spike 21% before the company announced a trading halt.

Will the corporate watchdog, the Australian Securities and Investments Commission (ASIC) investigate further, especially considering Bradken announced that it had received another takeover offer on April 1, before trading resumed?

Source: Commsec

As you can see in the chart above, shares soared to $2.39 before the trading halt was called. Shares have fallen away after trading was resumed, but are still trading up 11.6%. It clearly appears that some investors had some idea the takeover offer had been received – but not announced to the market – and began buying up shares. pushing up the share price. You can clearly see the spike in volumes at around the $1.875 mark. Takeover offers generally result in company's share prices rising, with the bidder sweetening the deal for shareholders, to make sure the deal gets across the line.

This is not the first time that shares in an ASX-listed company have spike higher before the company announced market-sensitive news, with several incidents going back to 2012 that we have noted, including Alkane Resources Limited (ASX: ALK) earlier this year. As yet, we've seen no action by the corporate cop on any of them.

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