Tom Online vote delay proposed
Tom Group, the media arm of Hutchison Whampoa, has proposed delaying a vote on its offer to privatise Tom Online, saying it wants to give the subsidiary's US-based shareholders more time to consider.
The vote will be postponed to as late as August 3 if shareholders agree during today's meeting which was originally scheduled for the buyout deal, Tom Group and Tom Online said in a joint statement.
Some market watchers said the unusual delay was a ploy for Tom Group to buy more time to lobby for support.
The low participation of Tom Online's American depositary receipt holders was a reflection that shareholders were not eager to approve the buyout, they said.
'They are probably not confident of getting enough votes to pass the deal; [the delay] would give Tom Group more time to solicit votes,' a market source said.
A company source denied the speculation, and said Tom Online's ADR holders may need more time to understand the deal better.
'It's normal practice to delay the deal as this is a busy season for investors to appoint proxy agents to cast their votes,' the source said.
Tom Group is offering HK$1.52 for each Tom Online share, a total of about HK$1.6 billion. Tom Group, which owns two-thirds of the online unit, would not sweeten the offer, a source said.
ING Wholesale Banking, Tom Online's independent financial adviser for the deal, earlier recommended that independent shareholders vote in favour of the offer, calling it 'fair and reasonable'.
It said Tom Online would need to undertake significant restructuring and additional capital investment in expansion which could potentially lead to share price volatility if it retained a separate listing.
Shares in Tom Group were unchanged yesterday at 93 HK cents after falling 7.92 per cent so far this year. Tom Online shares slid 1.36 per cent to close at HK$1.45, extending this year's loss to 5.84 per cent.