Henderson Land Development (0012) is just one step away from taking control of Hong Kong and China Gas (0003), or Towngas, after an institutional shareholder of Henderson Investment (0097) consented to vote for the transaction, market watchers said yesterday.
"Now it's a done deal," corporate governance advocate David Webb said.
US-based Elliott Capital Advisors, which holds 9.76 percent of Henderson Investment, has agreed to vote following the extra HK$3.12 billion offered to shareholders of Henderson Investment, on top of the earlier HK$3.71 billion cash offer. The hedge fund manager has been stockpiling Henderson Investment shares since the cash offer on October 3. Elliott Capital Advisors' stake in the company represents 30.8 percent of all independent votes.
An analyst said the additional cash offer had been "clearly made to satisfy Elliott Capital Advisors."
Webb, who still opposes the deal, said earlier the fund may block or carry the deal on its own as "voter turnouts are seldom more than 75 percent."
Despite a nominal HK$6.83 billion- with-shares offer, the parent will only spend HK$2.19 billion since it already owns 67.9 percent of its investment arm.
BNP Paribas raised Henderson Land's target price to HK$80.70 from HK$78 yesterday after the announcement, citing a higher chance of the deal being approved.
"However, the share price performance of Henderson Land against Towngas remains critical [for the poll]," BNP analyst Manfred Ho said.
Towngas rose 4.35 percent to HK$21.60 yesterday, while Henderson Land fell 6.35 percent to HK$67.35. Henderson Investment jumped 8.89 percent to HK$16.42.
Citi Investment Research said the restructuring "will streamline Henderson Land's structure and create synergies in China and Hong Kong."
This is Henderson group's third restructuring attempt. Previous bids were voted down in 2003 and last year.