The plan by AsiaSat’s management to take the satellite operator private has been scuppered by its minority shareholders.
At a specially arranged court meeting held on 18 July, the company’s independent shareholders, specifically those shareholders…
The plan by AsiaSat’s management to take the satellite operator private has been scuppered by its minority shareholders.
At a specially arranged court meeting held on 18 July, the company’s independent shareholders, specifically those shareholders in the free float, overwhelmingly voted against the proposal to take AsiaSat private.
The free float shareholders represent approximately 25.3% of the company and, of the 91.37 million shares represented in the vote, only 5.7 million voted in favour of the scheme. This meant that not only did the proposal not achieve the requisite majority, but was disapproved by over 10% of the votes. As such, under takeover code rule 2.10, the plan cannot be put into effect and has lapsed.
In addition, pursuant to rule 31.1 of the code, neither the offeror, nor those parties who acted in concert with it in the course of the proposal, may announce a new offer for AsiaSat over the next year without the permission of the Securities and Futures Commission of Hong Kong.
The privatisation plan was first announced back in late March 2012 with the company’s senior management forming a Management Stock Ownership Trust (MSOT) in order to buy out the minority shareholders and take the company private.
MSOT offered to pay the independent shareholders HK$22 (US$2.83) per share for the cancellation of their 98.9 million shares, a 32.29% premium over the average of the closing prices as quoted on the stock exchange for the 90 trading days up to 21 March.
MSOT estimated that the offer would cost approximately HK$2.246bn (US$289m) and intended to finance this through a loan arrangement with HSBC as well as the internal resources of the group. The privatisation was then expected to be finalised by September.
The plan had the backing of AsiaSat’s 74.43% majority shareholder, Bowenvale, a holding company owned by China International Trust and Investment Corporation (CITIC) and General Electric Capital Corp.
Once privatised, Bowenvale would have remained the majority shareholder while the MSOT Trustee would own a 25.57% stake, comprising the entirety of the free float as well as the 0.25% controlled by the ESAS Trustee and by some of the company’s directors, including CEO William Wade and former CEO and executive chairman Peter Jackson.
MSOT had stated that the logic behind the planned privatisation was predominantly due to the low level of liquidity in the company’s shares, a result of Bowenvale’s dominant position. The company added that, by delisting its shares, it will have “greater flexibility in the structuring of possible future corporate transactions”.
Indeed, one source told SatelliteFinance that the privatisation was likely to have been a precursor to a potential sale in early 2013. General Electric is widely thought to be seeking an exit, although CITIC is expected to seek to remain a significant shareholder.
HSBC is financial adviser to MSOT on the proposal, while Anglo Chinese Corporate Finance was adviser to the independent boards committee.
