HNA Group is in advanced talks about making a formal takeover offer for logistics provider CWT after almost a year of exclusive talks, in a deal valuing the Singapore-listed firm at about $1.4 billion, people with knowledge of the matter said.
The Chinese conglomerate is discussing a potential bid of around $2.30 per CWT share, according to the people, who asked not to be identified as the negotiations are private. HNA may announce the offer within the next week at the earliest, though it has not yet reached a final agreement on all terms of the transaction, the people said.
A bid of $2.30 per share would represent a premium of about 12 per cent to CWT's Wednesday closing price of $2.06. Details of the offer may change, and it is possible the potential deal could still fall apart or be delayed, the people said.
HNA plans to first buy a stake from CWT's biggest shareholder, C & P Holdings, which will trigger a takeover offer for the rest of the firm under Singapore listing rules, according to the people.
CWT shares, which rose as much as 1.5 per cent yesterday, were up 0.5 per cent in the afternoon session when the company suspended trading pending an announcement.
Representatives for HNA and CWT did not immediately respond to requests for comment.
HNA, one of China's most acquisitive companies, started talks in May last year about buying a stake in CWT.
The potential bid was delayed as the Chinese conglomerate deliberated which of its many entities would be used to make the offer, sources said in October.
HNA operates airlines, hotels and tourism businesses and is pursuing an aggressive global expansion strategy. A purchase would further strengthen HNA's logistics operations, bringing it access to CWT's network of regional offices and partners across 90 countries from Peru to Kuwait.
The Chinese firm bought Swissport International, the world's largest provider of ground and cargo handling services, last year for 2.7 billion Swiss francs (S$3.8 billion). CWT was founded in 1970 and employs about 6,000 people, according to its website. It offers services including commodity logistics, freight forwarding, warehousing and defence procurement. C & P Holdings owns 31.9 per cent of the firm, according to CWT's 2015 annual report.
CWT chairman Loi Kai Meng jointly controls the investment vehicle with CWT director Liao Chung Lik and businessman Lim Soo Seng. CWT chief executive Loi Pok Yen, who is the chairman's son, holds a 5.4 per cent stake in CWT.
BLOOMBERG
