Chinese Estates shares win on privatization offer

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By P.R. Venkat

The shares of Chinese Estates (Holdings) Ltd. rose on the Hong Kong Stock Exchange on Thursday after its majority shareholders offered to privatize the company to protect it from a tough business environment.

The company, which is controlled by Hong Kong billionaire Joseph Lau and his wife Chan Hoi-wan, made an offer Wednesday night to buy shares they don’t already own in Chinese Estates for HK $ 1.91 billion. Kong ($ 245.4 million). .

The billionaires, who already own nearly 79% of the company, have offered to pay HK $ 4.00 per share, almost 84% premium over the last traded price of HK $ 2.18.

Chinese Estates shares rose 31% when trade opened and are now 29% higher at HK $ 3.74.

“The Covid-19 pandemic is believed to continue to affect the business environment in which the group operates for some time. In light of the latest developments in the Covid-19 pandemic, it is expected that the group’s business operations will continue to encounter challenges and uncertainties, ”the company said.

The group also spoke of other challenges for its business, such as its stake in China Evergrande Group amid the conglomerate’s liquidity problems.

Chinese Estates had reduced its stake in the struggling real estate developer last month and said its board was cautious and concerned about Evergrande’s liquidity problems.

He currently owns a 4.39% stake in Evergrande, which is facing serious financial difficulties that have seen its share fall by more than 80% since the start of the year.

Chinese Estates said its privatization offer and proposed delisting from the Hong Kong Stock Exchange would provide its shareholders with the ability to sell their shares without suffering any liquidity and settlement risk.

Write to PR Venkat at venkat.pr@wsj.com


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