SINGAPORE (Nov 6): CITIC Envirotech has received an 55 cents per share offer from 56.4% owner CKM (Cayman) Company (CKM) to delist from the Singapore Exchange.
The offer price also values the China-based water treatment company at $1.34 billion.
CKM is an investment holding company incorporated in the Cayman Islands and is an indirect wholly owned subsidiary of CITIC Environment Investment Group. CITIC Environment is in turn a member of the CITIC Group Corporation.
Shares in CITIC Envirotech last traded at 37 cents before a trading halt was called before Monday’s market opening in preparation for the announcement.
CKM says the exit offer price of 55 cents per share in cash represents a premium of some 68.5% over the three-month volume-weighted average price (VWAP).
The price-to-Net Asset Value multiple of 1.15 implied by the exit offer price also exceeds CITIC Envirotech’s one-year historical average.
In its Wednesday night filing, CKM says CITIC Envirotech is unlikely to require access to Singapore capital markets to finance its operations in the foreseeable future.
By going private, CITIC Envirotech will also be able to save on compliance and associated costs as well as focus resources on its business operations.
CKM has received irrevocable undertakings from founding shareholders Lin Yucheng and Pan Shuhong to accept the exit offer in respect to some 15.6 million shares or 0.64% of the entire issued share capital.
Hao Weibao, president and vice-chairman of CITIC Environment, says, “The exit offer price provides an attractive and liquid cash opportunity for shareholders who are not prepared to bear the business risks associated with the company to realise a clean exit at a premium. The successful delisting of the company will enable us, together with the management, to have a longer horizon to manage and plan the business. This offers more control and flexibility to drive the future growth of the company.”
CLSA Singapore is the sole financial adviser to the offeror.
