China Hainan Rubber, a state-owned holding company in China listed on the Shanghai Stock Exchange, has made a cash offer to acquire 574.2 million shares in the capital of Singapore-listed Halcyon Agri Corporation for approximately US$180.9 million. The number of shares represents 36% of the total issued and paid-up share capital of Halcyon Agri.
The offer price is 50.3% above the last translated price of HAC shares on 11 November and 73.3% higher than the volume-weighted average price (VWAP) of the HAC shares for one month.
Under the SPA, Hainan Rubber shall be entitled to assign its rights and delegate its obligations under the SPA to the its nominee or a wholly-owned subsidiary to be incorporated (SPV).
On the basis that Hainan Rubber exercises such right of assignment and delegation, the SPV shall be the buyer of the share shares and the entity undertaking the Halcyon Agri offer.
According to Halcyon Agri’s statement, both rubber businesses are “complementary and synergistic”, with China Hainan Rubber viewing the share acquisition and mandatory general offer as an opportunity to integrate both companies’ resources.
This is to “improve overall operating efficiency, move up the technology and value chain, and to benefit from economies of scale”, according to Halcyon Agri.
Following the acquisition, China Hainan Rubber says it does not intend to introduce any major changes to the existing business or management of Halcyon Agri. It also does not intend to discontinue the employment of the employees of Halcyon Agri or re-deploy any of the fixed assets of Halcyon Agri, other than in the ordinary course of business.