Sinopec, ENN extend $2.2 bln offer for China Gas
HONG KONG Aug 6 (Reuters) - Chinese oil giant Sinopec Corp and gas distributor ENN Energy Holdings are extending their $2.2 billion offer for China Gas Holdings again, this time by a month, as they seek regulatory approvals to proceed with Hong Kong's first unsolicited takeover bid.
Sinopec and ENN are finding the odds increasingly stacked against them as regulatory hurdles remain uncrossed eight months after their offer and key shareholders of the target company place new obstacles in their way, sources with direct knowledge of the matter have told Reuters.
In a filing with the Hong Kong stock exchange, the Sinopec/ENN consortium said on Monday they have decided to extend the offer until September 6 p e nding approvals from various Chinese authorities, including the country's commerce ministry, which recently extended its anti-monopoly review for the offer to around the end of August.
Buying China Gas would give Sinopec and ENN access to the country's largest portfolio of natural gas distribution projects. But analysts say the consortium will have to win regulatory approvals and raise its offer to win the backing of China Gas shareholders.
The consortium had already extended the offer period three times over eight months in the absence of regulatory approval and permission from China Gas's board to conduct due diligence on the company that has piped-gas operations in 160 cities and 20,000 employees.
The consortium has now set September 6 as the "long stop date", meaning if by that date pre-conditions set out in their indicative proposals, including winning the necessary regulatory approval and conducting due diligence on China Gas, are not met, the group could drop the offer or reset the long-stop date.
In December last year, Sinopec and ENN made a conditional cash offer of HK$3.50 per share for China Gas, making it the first unsolicited offer in Hong Kong.
China Gas rejected the offer, saying it failed to reflect the true value of the company, and its share price has since traded consistently above the offer price as some of its key shareholders jostled to raise their stakes in the company.
Shares in China Gas ended little changed at HK$4.26 on Monday, a 22 percent premium to the offer price.
About 51 percent of China Gas is held by state-controlled utility Beijing Enterprises Group (BJEG) and two other investors, one of them a venture set up by London-listed Fortune Oil and former managing director of China Gas Liu Minhui, and the other a unit of South Korea's SK Group . (Editing by Greg Mahlich)
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