Minority shareholders have once again blocked a full takeover of Hong Kong-based satellite operator AsiaSat, after most of them rejected Chinese government-backed Bowenvale’s buyout bid.
The HK$2.6bn (US$335m) offer for the 26% that Bowenvale does not…
Minority shareholders have once again blocked a full takeover of Hong Kong-based satellite operator AsiaSat, after most of them rejected Chinese government-backed Bowenvale’s buyout bid.
The HK$2.6bn (US$335m) offer for the 26% that Bowenvale does not already own was only accepted by shareholders holding about 4.3% of the group, far below the level needed to launch a compulsory acquisition of all the shares.
However, the shares that were tendered have pushed the proportion of AsiaSat in public hands to below the 25% minimum that is required for a listing in Hong Kong.
AsiaSat said in a regulatory filing that talks are underway with the stock exchange “to take appropriate steps to ensure that sufficient public float exists in the company”.
The buyout offer was issued soon after private equity firm Carlyle paid US$483.3m for General Electric’s 49.5% economic and 50% voting interest in Bowenvale, a JV shared with China’s Citic.
That deal completed on 12 May, prompting Bowenvale to make an offer for AsiaSat’s free float to comply with Hong Kong’s takeover code.
Goldman Sachs and BofA Merrill Lynch offered HK$26 for each of the 100 million shares that were in free float on behalf of the companies – the same price Carlyle paid for Bowenvale’s shares. This was a 3.7% discount to their HK$27 closing price on the last trading day before Carlyle’s offer in December.
It this is the third time that investors have failed to buy out all of AsiaSat’s minority shareholders over the last eight years.
A plan by the operator’s management to buy shares in the free float at HK$22 each – later upped to HK$23.5 – fell apart in 2012, when its independent shareholders overwhelmingly voted against the move. The HK$23.5 price represented a 24% premium on the operator’s shares before that privatisation proposal was announced.
Before that, GE and Citic were forced to scrap a buyout bid in 2007 after the US Department of State blocked the deal.
Immediately following the completion of the latest buyout attempt, Bowenvale held 78.703% of AsiaSat, the operator’s directors owned 0.312%, and the rest was held by the public.
