The chairman and executive director of Cross-Harbour Holdings is proposing to acquire the remaining majority stake not already held for HKD 4.03 billion (USD 519.86 million).
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Rose Dynamics, a British Virgin Islands-incorporated, wholly-owned subsidiary of Cheung Chung Kiu’s Windsor Dynasty, holds 22.8 per cent of the motoring school-to-tunnel operator.
It, and parties acting in concert, are offering HKD 14.00 per share in cash for the 287.79 million stocks not already held, but intend to maintain Cross-Harbour’s listing status in Hong Kong.
Should Rose acquire the requisite percentage that would trigger a mandatory takeover, it does not intend to exercise its right.
The bid represents a premium of 42.4 per cent to the close of HKD 9.83 apiece on 13th September, the last trading day prior to the approach, and of 34.9 per cent to the 30-day average of HKD 10.38.
It equates to a discount of 29.0 per cent to the audited consolidated net asset value of HKD 19.71 per share, as at 31st December 2019, and of 30.7 per cent to that of HKD 20.19, as at 30th June 2020.
Cross-Harbour is a holding company of investments in motoring schools, treasury management and securities, tunnel operations and electronic toll collection.
The group generated total revenue of HKD 374.74 million in the six months ended 30th June 2020 (H1 2019: HKD 333.77 million) and booked net profit of HKD 208.06 million (H1 2019: HKD 474.97 million).
It noted the sudden outbreak of coronavirus disease 2019 has meant a range of economic activities were disrupted.
The first-quarter gross domestic product of Hong Kong dropped by 9.1 per cent compared with the same period of a year earlier, it was the third consecutive quarterly contraction in the last decade.
Amid the pandemic and year long social turmoil, local demand continues to be weak, business sentiment deteriorated markedly.
Zephyr, the M&A database published by Bureau van Dijk, shows 442 public takeovers have been announced globally so far this calendar year.
If officially signed off, Cross-Harbour’s could be placed 101st by value.
© Zephus Ltd