Tag Archives: ENN Energy

Fosun, Tencent Eye Gas Stations

Fosun chases US Aurora, Sinopec unit

Gas stations were never that attractive to me as an investment, but a group of major firms seem to think differently as oil refining giant Sinopec (HKEx: 386; Shanghai: 600028) gets set to sell up to 30 percent of its retail arm. That’s my conclusion, following reports that domestic investment giant Fosun (HKEx: 656) and Internet leader Tencent (HKEx: 700), and Canadian retailer Alimentation Couche-Tard (Toronto: ATDb) are among the finalists bidding for a stake in the Sinopec unit. In separate headlines, the acquisitive Fosun is also reportedly in talks for another mega deal that would see it purchase the US unit of global insurance giant Swiss Re (Switzerland: SREX). Read Full Post…

China Gas: New Bid Coming from Sinopec? 中石化会提高收购中国燃气的价格吗?

I’ve been watching with fascination for much of the last year as oil refining major Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) makes a bizarre bid for China Gas (HKEx: 384), a natural gas pipeline operator that has made it clear it has no desire to be acquired. Despite seeing its $2.2 billion offer rejected last December and no formal talks or new offers since then, Sinopec has repeatedly extended the deadline for its bid, including the latest extension it has just disclosed through a filing with the Hong Kong Stock Exchange. (HKEx announcement) All this leads me to believe that Sinopec and bidding partner ENN Energy (HKEx: 2688) are preparing to raise their bid for China Gas, with a new offer possible as soon as the deal gets regulatory approval.

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Sinopec’s China Gas Pursuit Gets Stranger 中石化并购中国燃气案越来越奇怪

When the history books are written, the ongoing pursuit of privately owned natural gas distributor China Gas (HKEx: 384) by state-owned oil giant Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) could well be remembered as one of the strangest cases of M&A in recent memory, marked by a series of cryptic moves by Sinopec including its latest public announcement in the case.

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Sinopec Weighs New China Gas Bid 中石化似乎考虑提高对中国燃气收购价

A small brouhaha broke out yesterday in Beijing, after an executive from the Sinopec-led (HKEx: 386; Shanghai: 600028; NYSE: SNP) group that made an unsolicited bid for privately held natural gas distributor China Gas (HKEx: 384) told reporters there would be no new offer after the original bid was rejected. It seems the executive from ENN Energy (HKEx: 2688), which launched the bid with Sinopec last December, made his remarks quickly as he walked past reporters while attending meetings at the National People’s Congress taking place this week in Beijing. Sinopec followed up later in the day with a “clarifying” announcement saying the remarks were purely the opinion of the executive, and that no decision has been made yet about whether the group will make a new and higher offer. (company announcement) The development of this deal has been quite unusual from the start, qualifying as what looks like China’s first truly hostile takeover bid. Sinopec and ENN made their original unsolicited offer late last year, in what would be a highly unusual move in western markets where the acquirer would usually approach the target company first and try to reach a deal before making a formal offer. It would only then launch a hostile unsolicited bid if the 2 sides couldn’t agree on a price. (previous post) In this case, it looks like Sinopec and ENN didn’t even approach China Gas before making their first offer — a choice that I attribute more to lack of experience than any real hostile intent, as most big Chinese state-run giants aren’t used to having their offers to buy other Chinese firms rebuffed in a nation where everything used to be owned by the state anyhow. In this case, China Gas is a relatively rare case of a privately owned company in the energy sector, and its management clearly didn’t like the idea that they weren’t consulted before Sinopec launched its bid. At the time of the initial rejection, Sinopec and ENN didn’t say much, but this latest comment from the ENN executive clearly wasn’t the message that Sinopec wanted to send to the market. Instead, this new clarification appears to indicate that Sinopec is seriously considering raising its offer in the near term, and may even this time decide to actually discuss the matter with China Gas before making its next move public. If it doesn’t reach a friendly deal or decides it still wants to make a new unsolicited offer, look for an interesting hostile takeover bid to potentially take shape, perhaps resulting in an unusual bidding war for China Gas.

Bottom line: Sinopec’s latest remarks indicate it is weighing a new higher bid for China Gas, potentially resulting in a hostile takeover attempt that could produce a bidding war.

Related postings 相关文章:

Battle Heats Up For China Gas

Sinopec Balks at Rebuff to Hostile M&A Bid 中石化试水敌意收购碰壁

Cash-Rich China Eyes More Global Energy Assets  财大气粗的中国企业着眼更多全球资源并购

Battle Heats Up For China Gas

What looks like one of the first true hostile takeover bids in the brief history of Chinese M&A just got a little more interesting, as a major shareholder of takeover target China Gas (HKEx: 384) has boosted its stake in the company, in what looks like a challenge to rebuffed suitors Sinopec (HKEx: 386; Shanghai: 600028; NYSE: SNP) and ENN Energy Holdings (HKEx: 2688). Sinopec and ENN launched their unsolicited $2.2 billion takeover bid for China Gas, owner of some lucrative China-based natural gas distribution networks, back in December, and was surprised when China Gas rebuffed the offer saying it was too low. (previous post) The rebuff showed that major state-run firms like Sinopec clearly aren’t accustomed to other major Chinese companies refusing their takeover offers, in a market where everything used to be state-owned and central most of the country’s M&A was planned by central leaders in Beijing. Sinopec declined to comment at the time on whether it would raise its offer, but many predicted it might do so and that a bidding war could even break out for China Gas if another suitor entered the picture. Now it seems that one of China Gas’ major stakeholders, South Korea’s SK Holdings (Seoul: 003600), has been quietly buying up China Gas shares, bringing its stake to more than 12 percent of the company. (English article) SK’s recent buying spree looks more opportunistic than reflecting any real long-term commitment to China Gas, and shows that the takeover saga is still developing. I wouldn’t be surprised to see Sinopec and ENN raise their offer for China Gas in the next month or two, and could easily imagine one or more new bidders also entering the picture to chase one of the few more interesting energy assets in China that is privately owned. If that happens, look for a lively bidding war to develop that could see China Gas ultimately sell for as much as $3 billion.

Bottom line: SK Holdings’ recent increase in its stake of hostile takeover target China Gas presages a potential bidding war that could see the company sell for as much as $3 billion.

Related postings 相关文章:

Sinopec Balks at Rebuff to Hostile M&A Bid 中石化试水敌意收购碰壁

Cash-Rich China Eyes More Global Energy Assets  财大气粗的中国企业着眼更多全球资源并购

Pricey M&A, Cheaper Gas Undermine Sinopec 溢价收购和成品油降价 中石化面对双重利空

Sinopec Balks at Rebuff to Hostile M&A Bid 中石化试水敌意收购碰壁

I’ve been watching with interest this week as the acquisition-hungry Sinopec (HKEx: 386; NYSE: SNP) made what many are saying was the first major attempt at hostile M&A by a Chinese company, only to become flustered when it was rebuffed. The rapid development of events shows that major Chinese companies are still neophytes in hostile takeovers, though this case would also indicate that they want to try more of this difficult form of deal making going forward as they look for strategic assets to build up their businesses. To recap, Sinopec surprised the markets earlier this week when it paired with ENN Energy (HKEx: 2688) to launch a $2.2 billion unsolicited bid for privately held China Gas (HKEx: 384), which operates a lucrative natural gas distribution network in China. China Gas fired back that the bid was too low, in a sharp rebuff that Sinopec and ENN clearly weren’t expecting. In the latest development, Sinopec’s chairman has said that now is “not the time” to consider a higher bid, indicating the company is unlikely to make a higher unsolicited offer in the near future. (English article)  Frankly speaking, I’m not surprised at the outcome for this first major effort at hostile M&A by a Chinese company. We need to guess a lot as clearly none of the parties are talking, but it doesn’t appear that Sinopec or ENN attempted a friendly takeover before making their hostile bid — a highly unusual occurrence in the world of M&A where the friendly route is always preferred to the hostile one. It also appears that Sinopec and ENN were completely unprepared for the rebuff they received, which again comes as a surprise as hostile offers are almost never accepted and anyone making such a bid usually has a back-up plan prepared that includes a higher bid or more detailed explanation of its actions if and when its original plan is rejected. The rapid developments in this case probably reflect a lack of experience by China’s big state-run firms in hostile M&A, and I suspect we may see Sinopec and ENN quietly enter direct negotiations with China Gas in the next few weeks, which could ultimately result in a deal more to China Gas’ liking. Regardless of the outcome in this case, Chinese firms are likely to see more stumbles in the years ahead as they try to become major global players in both friendly and hostile M&A.

Bottom line: The rapid collapse of Sinopec’s hostile offer for China Gas reflects the former’s inexperience at hostile M&A, and a friendly takeover could come instead in the next few months.

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2012: The Year of China Resource M&A? 2012:中国企业的资源并购年?

Pricey M&A, Cheaper Gas Undermine Sinopec 溢价收购和成品油降价 中石化面对双重利空

Sinopec Latest Victim of Environmental Scrutiny 中石化管道工程因环保计划不足被叫停