SINGAPORE (Aug 23): HNA Holding Group, the offeror which is making a bid for CWT, announced a general meeting will be held on Sept 7 for shareholders to vote on the acquisition.
In a Wednesday report, OCBC analyst Eugene Chua says all pre-conditions have been satisfied apart from approval by HNA shareholders.
See: HNA said to face lender questions on US$1 billion CWT takeover
See: China's HNA boosts Dufry stake, pursues CWT purchase plan
While HNA has said it will finance the acquisition solely through an interest-free unsecured fund to be provided by its associates in the event external financing is not available, Chua remains cautious given no visibility over the outcome of the China banking regulator’s probe on overseas loans made to HNA.
There is also no certainty over whether HNA will truly be able to fund the acquisition without external financing.
“All considered, we believe it makes sense for shareholders to reduce their risk by selling part of their holdings in the market with uneven risk-reward based on Tuesday’s $2.25 closing price,” says Chua.
This offers a potential upside of 3.6% vs. potential downside of 15.1%, given our FV on CWT without the deal is $1.91.
“Our rating of accept the offer, once the formal VGO is made, remains unchanged,” says Chua.
As at 11.34am, shares in CWT are up 1 cent at $2.26.
