Battle Heats Up For China Gas
What looks like one of the first true hostile takeover bids in the brief history of Chinese M&A just got a little more interesting, as a major shareholder of takeover target China Gas (HKEx: 384) has boosted its stake in the company, in what looks like a challenge to rebuffed suitors Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) and ENN Energy Holdings (HKEx: 2688). Sinopec and ENN launched their unsolicited $2.2 billion takeover bid for China Gas, owner of some lucrative China-based natural gas distribution networks, back in December, and was surprised when China Gas rebuffed the offer saying it was too low. (previous post) The rebuff showed that major state-run firms like Sinopec clearly aren’t accustomed to other major Chinese companies refusing their takeover offers, in a market where everything used to be state-owned and central most of the country’s M&A was planned by central leaders in Beijing. Sinopec declined to comment at the time on whether it would raise its offer, but many predicted it might do so and that a bidding war could even break out for China Gas if another suitor entered the picture. Now it seems that one of China Gas’ major stakeholders, South Korea’s SK Holdings (Seoul: 003600), has been quietly buying up China Gas shares, bringing its stake to more than 12 percent of the company. (English article) SK’s recent buying spree looks more opportunistic than reflecting any real long-term commitment to China Gas, and shows that the takeover saga is still developing. I wouldn’t be surprised to see Sinopec and ENN raise their offer for China Gas in the next month or two, and could easily imagine one or more new bidders also entering the picture to chase one of the few more interesting energy assets in China that is privately owned. If that happens, look for a lively bidding war to develop that could see China Gas ultimately sell for as much as $3 billion.
Bottom line: SK Holdings’ recent increase in its stake of hostile takeover target China Gas presages a potential bidding war that could see the company sell for as much as $3 billion.
Related postings 相关文章:
◙ Sinopec Balks at Rebuff to Hostile M&A Bid 中石化试水敌意收购碰壁
◙ Cash-Rich China Eyes More Global Energy Assets 财大气粗的中国企业着眼更多全球资源并购
◙ Pricey M&A, Cheaper Gas Undermine Sinopec 溢价收购和成品油降价 中石化面对双重利空
