One of China Gas' suitors, ENN Energy, says it may enhance its takeover offer after its shareholders voted yesterday in support of the bid, which was also extended by a month.
With several other potential buyers joining the fray by raising their stakes in China Gas, which pushed up its share price, the offer by the consortium of ENN and China Petroleum & Chemical (Sinopec) is now seen as too low.
It offered HK$3.50 per share - a 20 per cent premium to the closing price before the unsolicited bid was announced in December.
Shares in China Gas closed at HK$3.92 yesterday.
'We are considering different options, [and raising the offer bid] is one of them,' Cheng Chak-ngok, executive director of ENN, said on the sidelines of the shareholders' meeting yesterday. Previously, a spokesman for the consortium said they did not intend to raise the offer price.
ENN and Sinopec made the US$2.2 billion takeover bid after it was approved by most ENN shareholders. It also met other preconditions - including approval from the Ministry of Commerce - under the mainland's anti-monopoly law.
The ENN-Sinopec consortium needs 50 per cent of the voting rights in China Gas for its hostile bid to succeed. It previously disclosed that it owned a 4.8 per cent stake in China Gas through Sinopec. Since the portion of free-float shares in China Gas has recently fallen below 45 per cent, the only way ENN's bid will succeed is if it joins forces with other major shareholders.
China Gas joint managing director and president Eric Leung repeated his criticism of ENN, saying China Gas shareholders were not willing to accept the offer, and its shares were trading well above the bid, which was still 'pre-conditional'. 'It seems impossible to us that this offer can succeed and we urge the consortium to allow it to lapse,' Leung said.