Henderson China wins the vote to go private

Shareholders of Henderson China Holdings yesterday approved a $1.38 billion privatisation offer from its parent Henderson Land Development.

The green light for the deal was given at a special general meeting, where 99.75 per cent of Henderson China's independent shareholders, representing about 400 million shares, voted in favour of the offer.

'We are glad that the support for our privatisation proposal was overwhelming,' Henderson Land vice-chairman Colin Lam Ko-yin said after the meeting. 'I believe the main reason was the healthy and hefty premium of our offer price. Shareholders are quite happy about it,' he said.

Under the terms of the deal, Henderson Land is offering $8 per share, up from the $7.50 per share offered previously, to buy out the 172.64 million shares it does not already own in Henderson China. The offer price represents a premium of 66.67 per cent over Henderson China's last closing price of $4.8 on May 13, before the privatisation plan was unveiled.

However, the price also represents a huge discount of 36.05 per cent to Henderson China's adjusted net asset value of $12.51 per share.

The approval by Henderson China's shareholders is in stark contrast to Henderson Land's $5.6 billion privatisation bid for its investment arm Henderson Investment in early 2003. That offer was voted down by minority shareholders citing the low offer price.