Lai See

PUBLISHED : Wednesday, 20 April, 2011, 12:00am
UPDATED : Wednesday, 20 April, 2011, 12:00am


Takeover panel puts the squeeze on Regent Pacific

Regent Pacific's A$345 million (HK$2.8 billion) on-off takeover of Australian iron ore miner BC Iron is now on again. A week after the Australian Takeovers Panel ruled that Regent Pacific's grounds for abandoning the takeover were unacceptable, Regent has put in place financing that it had previously terminated. Regent's board has also decided to change its recommendation to its shareholders that they now vote in favour of the A$3.30 per share deal, according to a statement on BC Iron's website.

In March Regent announced that it was withdrawing its bid because it believed that Consmin, BC Iron's majority shareholder, was opposed to the deal. This was based on an article published on a US website which said that Consmin was 'flatly opposed' to the deal without quoting anyone directly.

Consmin, however, said that it had written to Regent saying that it was waiting to see the independent expert's valuation of BC Iron. The report should hold no mysteries for Consmin which must have a reasonable idea of its value. Lai See wonders if Consmin, which is controlled by Ukrainian billionaire Ganeddy Bogolyubov, is hoping that Regent's offer will flush out a higher bid. This is not an entirely comfortable position for Regent Pacific, which finds itself between a rock and a hard place in that it has the Australian Takeovers Panel squeezing it on one side and the possibility that Consmin could vote the deal down on the other.

Bitter row over dual listing

The bitter row over manganese miner OM Holdings' (OMH) planned Hong Kong listing moves to Singapore today. OMH, which is headquartered in Singapore but listed on Australia's ASX, can expect a hostile AGM today, when shareholders will be asked to vote on proposal to allow the company to dual list in Sydney and Hong Kong.

The move is opposed by Consmin, which owns a minority 11.4 per cent stake. Consmin unsuccessfully attempted to block today's meeting in an Australian court but was instead granted a hearing on May 13 to discuss the proposed dual listing. Consmin is opposing the dual listing since it is to be accompanied by a massive issue of 345 million shares equivalent to 68 per cent of existing shares in issue, at a 20 per cent discount to its current price and moving its primary listing from Sydney to Hong Kong.

Bogolubov has clashed with the board previously. 'Consmin is not going to sit idly on the sidelines and watch the board of OMH massively dilute existing shareholders through the company's largely unexplained plans to dual list in Hong Kong,' Bogolyubov said. 'As we see it, OMH is run by the board and for the board and we are not going to watch minority shareholders be significantly disadvantaged yet again.'

Bogolubov is concerned at the huge dilutive impact of the proposed new share offer. The weak point for OMH is resolution 10, regarding the need to change the company's by-laws before it can dual list in Hong Kong.This resolution has a higher threshold, with the approval of 75 per cent of shareholders required.

Consmin's case has been helped by a report recommending that shareholders vote against the dual listing and other proposals, by Institutional Shareholder Services a leading provider of proxy advisory and voting services to the global institutional investor community. Let the battle commence.

Asia's pollution hub?

A look at the government's air pollution index shows that, at the general stations, pollution was high while at the roadside, it was high to very high. However, this somewhat bland description masks the extent of the pollution in the air we are breathing.

According to the Environmental Protection Department's website, the respirable suspended particulates (RSP) at roadside level in Central between 8am and 6pm yesterday ranged between 105-143.6 microgrammes per cubic metre(mcm).

The World Health Organisation guidelines stipulate that, over a 24 hour period, a safe level is 50mcm. Above that level, the pollution begins to impact on health. The Hong Kong government's 24-hour level is 180mcm.

So levels of RSP were between two and three times higher than WHO guidelines. Nitrogen dioxide levels were also high, ranging between 180.7 and 244.5 mcm. WHO guidelines are for an average 200mcm per hour.

This is not a one-off and historical air pollution figures show that Hong Kong is frequently well-above the WHO guidelines. Despite this, the government is dragging its feet over setting new air quality objectives and is even further away from thinking about how to meet them. Another feather in the cap of Asia's world city.