Buyout fund enters the fray of Yingde’s boardroom feud with takeover offer
Wednesday, March 01, 2017
(SCMP by Eric Ng, Peggy Sito and Ren Wei) - A private equity fund has stepped into the middle of a bitter boardroom tussle at Yingde Gases Group, with a takeover offer to two feuding factions that could start a bidding war for the Chinese industrial gas supplier.
PAG Asia Capital, one of Asia’s largest private equity buyout funds, offered HK$6 per share to Yingde’s three founding shareholders with 41.9 per cent of combined holdings, on the condition that it can eventually own more than 50 per cent of the gas company.
The offer price is at the top end of the HK$5.50 to HK$6 price range offered on January 20 by Air Products & Chemicals Inc., in what could potentially have been the largest US takeover of a Chinese company in a decade. Both Yingde and Air Products supply oxygen and other industrial gases to steel mills and chemical plants.
Yingde’s chairman Zhao Xiangti, former chairman and chief executive Mark Sun Zhongguo and former chief operating officer Trevor Strutt have entered into a “legally binding memorandum of undertaking with PAG under which each of them has undertaken to accept the offer,” Yingde said in a Wednesday filing to Hong Kong stock exchange.
The offer “will be conditional only upon [PAG] receiving acceptances of the offer, which together with shares it has acquired or agreed to acquire, will result in [PAG] holding more than 50 per cent of [Yingde],” Sun and Strutt said in the statement.
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