O-Net receives takeover offer

A consortium is proposing to take O-Net Technologies private with the support of Shenzhen Zhengxinhe Consultancy and existing shareholder Kaifa. Chairman Na Qinglin and LVC Technology Legend have formed British Virgin Islands-incorporated Optical Alpha as their investment platform. They are introducing Shenzhen Zhengxinhe Consultancy into this vehicle by way of an onshore subscription agreement for new shares worth HKD 730.00 million (USD 94.19 million). Following this, Na Qinglin, LVC and the new investor will own stakes of 58.9 per cent, 20.7 per cent and 20.4 per cent, respectively. Optical Alpha, in turn, will own 82.2 per cent of Optical Beta, the British Virgin Islands-incorporated vehicle formed to carry out the actually takeover. Kaifa, the wholly-owned subsidiary of Shenzhen Kaifa Technology, already has a 20.5 per cent stake in O-Net. It intends to hand over 60.00 million scrips as part of the takeover and will exchange its remaining 111.12 million shares for a 17.8 per cent stake in Optical Beta. The bid of HKD 6.50 apiece values the entire company at HKD 5.54 billion and the offer at HKD 2.83 billion. It represents a premium of 23.6 per cent to the close of HKD 5.26 on 3rd July, the last day before the shares were halted from trading. It is also 128.9 per cent higher than the audited net asset value of HKD 2.84 per share, as at 31st December 2019. According to the statement, “the liquidity of the shares has been at a relatively low level over a prolonged period of time”. The proposal “is intended to provide the scheme shareholders with an attractive opportunity to realise their investments and interests in the company for cash at a premium”. O-Net is an investment holding company principally engaged in the design, manufacture and sales of optical networking products and machine vision systems and sensors. The company generated revenue of HKD 2.58 billion in the 12 months ended 31st December 2019 (FY 2018: HKD 2.52 billion) and posted net profit of HKD 108.78 million (FY 2018: HKD 258.21 million). © Zephus Ltd

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