Issue cut after SFC rules one investor was 'acting in concert'
New World Development will slash the size of its planned share sale by more than $2 billion in a move sources say will prevent some big-name investors facing scrutiny by the Takeovers and Mergers Panel.
The company said it would reduce the placement by 62 per cent from 280 million to 107 million new shares at the original pricing of $11.50, now netting $1.2 billion compared with the previous $3.22 billion target.
The new placement represents 2.97 per cent of the enlarged capital of NWD, said a statement filed with the stock exchange yesterday.
Brokers speculated one of the global hedge funds, dubbed predatory 'crocodiles' by anxious managements, might have been behind the move. British-based The Children's Investment Fund Management (TCI), which has been a heavy buyer of NWD in the past months, is said to have questioned the transparency of the share placement and complained.
However, sources close to the Securities and Futures Commission said it found out in a routine transaction inspection. They said the share sale was cut because the SFC had ruled one investor was 'acting in concert' with Chow Tai Fook Enterprises, the single largest shareholder of NWD.
Under the takeovers code, this covers 'persons who, pursuant to an agreement or understanding, actively co-operate to obtain or consolidate 'control' of a company' and are likely to make the same voting decision.