Wu names YTL in Cepa bidding war
The future ownership of Consolidated Electric Power Asia (Cepa), apparently sewn up two weeks ago, was thrown into doubt yesterday when the group revealed it had been approached by another company interested in a controlling stake.
Cepa's surprise announcement to the stock exchange follows the decision by its parent, Gordon Wu Ying-sheung's Hopewell Holdings, to sell most of its 60.4 per cent interest in Cepa to Southern Electric Co of the US earlier this month.
Yesterday's brief statement said the Cepa board 'has received an approach from a third party for the possible acquisition of a controlling interest in Cepa. However no offer or formal proposal has been received'.
In an announcement issued just before midnight, Cepa confirmed earlier comments made in Manila by Mr Wu that the approach had been received by Malaysian property and construction based conglomerate YTL Corp, which is also in the independent power business.
Hopewell also reassured shareholders in the announcement that under the deal agreed with Southern that it had 'irrevocably undertaken . . . to vote in favour of the scheme.' Despite the latest twist, both Cepa and Hopewell shares were allowed to remain trading, with Hopewell falling 10 cents to $5.35 and Cepa up 10 cents to $17.95.
The exchange last night expressed concern about the way the information had apparently been disclosed.
'We are trying to ascertain what Gordon Wu said in Manila. If his comments [about YTL] were correctly reported the company should certainly have come clean on that,' said Herbert Hui, the exchange's deputy chief executive.
Mr Hui said the exchange was seeking more information from Hopewell's advisers, investment bank Peregrine. If it emerged that material information was not disclosed yesterday morning the matter would be pursued further, he said.
Southern Electric's regional director in Hong Kong, Ray Harris, said he had no comment other than that he was hopeful the original deal would go ahead.
The US company's $18.50 a share general offer for Cepa values the Asian power group at $24.5 billion and would leave Southern Electric with an 80 per cent holding.
Alice Hui, an analyst at WI Carr, described the Southern Electric offer as a 'miracle deal' and said any new offer would have to be very aggressive.
She said however that if Hopewell was offered a private placement for less than 35 per cent of Cepa shares it may well find that attractive.
In such a case, the buyer would not be bound to make a general offer.
As for the apparent interest of YTL, analysts did not question its motives. But some were unsure how it would finance a possible foray into Cepa given that its capitalisation is little more than Cepa itself.
Cepa bid fits Yeoh's expansive vision. Page 2 Monitor, Page 12 Markets Post
