Yingde founders’ PAG deal forces Air Products’ hand in bidding war
The three founding partners of Yingde have essentially set a floor price for the stock at HK$6 per share, which any new bidder will need to surpass.
A swift decision by Yingde Gases Group’s chairman Zhao Xiangti to join his rival directors Mark Sun Zhongguo and Trevor Strutt to accept PAG Asia Capital’s offer to buy the company has forced United States-based Air Products’ hand to get into the bidding game.
After weeks of bickering over who deserve to be in charge, the two feuding factions of founding shareholders - one led by Zhao and another consisting of former chairman Sun and former chief operating officer Strutt - have at least come to the same page on one thing.
They now appear to be -- at least through their public statements -- in agreement that selling their shares to the highest bidder is the way to go.
The three founding shareholders, who together own 41.9 per cent of Yingde, are bound by an irrevocable memorandum of undertaking signed on Monday to sell their shares at HK$6 each to PAG.
PAG, one of Asia’s largest private equity funds with US$16 billion of assets under management, has stipulated a condition that it must eventually be able to own more than 50 per cent of Yingde, including whatever shares it already owns or will buy in the open market, besides taking over the trio’s 41.9 per cent stake.
That means the December 2016 offer made by Air Products of HK$5.5 to HK$6 per share isn’t good enough, especially when the offer is subject to due diligence, and certain undisclosed conditions.