Shareholders of Hong Kong Catering Management, which holds 55 per cent in bakery firm Saint Honore Holdings, will vote on Thursday on the sale of its stake for HK$346 million to make way for Circle K operator Convenience Retail Asia privatising the bakery chain. Analysts said CR Asia's HK$629 million bid to buy Hong Kong-listed Saint Honore looks set to succeed, despite shareholders of the bakery firm having voted down in 2004 a proposal to be privatised by its controlling shareholders because Saint Honore's growth outlook remained lacklustre. The key difference between the two proposals lies in the offer. Under the latest proposed takeover, CR Asia will pay HK$2.95 per Saint Honore share, a 43.9 per cent premium to the closing price of HK$2.05 before the announcement. Saint Honore shareholders also have the option of receiving one CR Asia share plus HK$2.95 in cash for every two bakery shares they hold. Saint Honore shares closed at HK$2.95 on Friday while CR Asia shares were last traded at HK$3.10. In 2004, the controlling shareholders of Hong Kong Catering Management - Glenn Chan Wai-cheung and his wife Catherine Chan King - offered to pay HK$1.09 in cash for every Saint Honore share, a 17.42 per cent discount. Altus Capital advised Saint Honore shareholders not to accept the offer. Somerley, which is advising Saint Honore's board on CR Asia's offer, recommended independent shareholders accept CR Asia's cash offer because of limited growth prospects for Saint Honore. Somerley did not recommend the share and cash offer because of the low trading liquidity of CR Asia, which means shareholders might have difficulty selling the shares later. Main board-listed Saint Honore, which is facing fierce competition from counterparts such as Maxim's, Arome Bakery and Tai Pan Bakery, reported a 31 per cent decline in net profit to HK$41 million for the 12 months ended in March last year. Second board-listed CR Asia, which aims to list on the main board next year, posted a 5.6 per cent increase in net profit to HK$55.6 million for the nine months ended September. Minority shareholders of Hong Kong Catering Management, 57.7 per cent owned by the Chans, would be the key to the success of the deal, analysts said. Its disposal of Saint Honore stake would require approval of at least 50 per cent of independent shareholders. Hong Kong Catering Management and the Chans together own 73.1 per cent of Saint Honore. The board of Hong Kong Catering Management, shares of which on Friday closed at HK$1.70, said it would pay at least 70 per cent of the proceeds of the Saint Honore stake disposal or 70 HK cents per share, as a special dividend to shareholders. Access Capital advised shareholders of Hong Kong Catering Management, which runs 18 restaurants, to accept CR Asia's cash offer, partly due to 'no assurance of sustainability of the current price level of CR Asia shares'.