China Gas has been in the news for the arrests of its top managers for suspected embezzlement, for a board row over the dismissal of an ex-chairman and now as the subject of a hostile takeover bid.
But the company is likely to stay in the limelight even if this bid fails.
Shareholders of rival mainland natural gas distributor ENN Energy will vote tomorrow on its proposed US$2.2 billion joint bid with state-backed China Petroleum & Chemical (Sinopec) at HK$3.50 per share. That is a 25 per cent premium to China Gas' last traded price before the bid.
To succeed, the ENN-Sinopec consortium needs the approval of at least 50 per cent of ENN shareholders and a statement of no objection from regulators in Beijing overseeing anti-monopoly legislation by tomorrow.
But even if these conditions are fulfilled, unless the consortium raises the price substantially, the bid looks set to fall through, since it requires the support of at least 50 per cent of China Gas' shareholders.
China Gas' major shareholders Beijing Enterprises Group - parent of listed conglomerate Beijing Enterprises - South Korea's SK Group and an alliance between China Gas former managing director Liu Minghui and Hong Kong-based mainland fuel supplier Fortune Oil had already amassed a combined stake of 51.01 per cent last week.