Chinese conglomerate HNA Group has tabled a pre-conditional general offer for logistics provider CWT after almost a year of exclusive talks with CWT's three controlling families.
HNA is offering $2.33 in cash for each CWT share, in a deal that values one of Singapore's largest logistics groups at about $1.4 billion.
CWT chairman Loi Kai Meng and his son, group chief executive Loi Pok Yen, together with the Liao and Lim families, own 65.1 per cent of CWT. The families have given their undertaking to accept the offer. HNA Group is making the offer through a special vehicle of Hong Kong-listed HNA Holding Group Co.
One pre-condition of the offer is that shareholders of HNA Holding Group must vote to approve the CWT takeover, although this is not expected to be a problem since two entities that collectively own 66.84 per cent of the Hong Kong-listed company have undertaken to vote in favour of the deal as well as provided assurance that they have sufficient financial resources and will fund the takeover.
Other pre-conditions include the receipt of certain anti-trust approvals from China.
HNA Holding Group has agreed to pay a $15 million deposit to CWT, which CWT will retain in the event that all pre-conditions are met and HNA does not proceed with the takeover. If the deal does not proceed because of material adverse effects created by CWT over the next five months however, the $15 million will be returned to HNA.
Trading of CWT shares had been halted since last Thursday. At $2.33 a share, the offer represents a 12.6 per cent premium to the last traded price of $2.07. The offeror intends to make CWT its wholly owned subsidiary and does not intend to preserve its listing status.
To ensure continuity in the management, business and operations of CWT, the offeror plans to retain the senior management team of CWT's key business units.
One of China's richest companies, HNA was founded by billionaire Chen Feng as the parent company of Hainan Airlines.
CWT operates in more than 90 countries and was once the warehousing and container trucking services arm of government-linked port operator PSA until C&P bought over the company in 2004.
CWT is also the sponsor of Cache Logistics Trust, and manages the Reit together with ARA Asset Management, with CWT holding a 40 per cent stake in the Reit manager.