Sinopec, ENN Energy launch $2.15-bn hostile bid for China Gas
14 Dec 2011
China Petroleum & Chemical Corp (Sinopec) and ENN Energy Holdings Ltd yesterday launched a hostile HK$16.7 billion ($2.15 billion) bid for privately-run natural gas distributor China Gas Holdings Ltd, in which Indian state-owned gas transporter GAIL Ltd and the Asian Development Bank have stakes.
If the deal materialises, the merged entity would become China's biggest downstream natural gas distributor.
The three companies were in talks last week to pursue a friendly takeover, but the negotiations failed, which prompted Sinopec and ENN Energy to take their offer hostile.
Sinopec, Asia largest refiner and natural gas distributor ENN Energy are offering HK$3.50 a share in cash, representing a 40-per cent premium to the 30-day average price of China Gas and a 25-per cent premium to its closing price on 7 December, when trading in the company's shares was suspended pending the outcome of an initial approach by Sinopec and ENN Energy.
ENN, the fourth-largest gas supplier in China will hold a 55-per cent stake in the combined entity if the deal succeeds, while its larger partner Sinopec will hold the remaining 45 per cent.
The two companies will fund the transaction according to their respective holdings.
