Management, private equity launch takeover bid for China Natural Gas
China Natural Gas, a NASDAQ-listed compressed natural gas provider, plans to go private, backed by a group comprising the company chairman and CEO and Themes Investment Partners. Ji Qinan, the chairman and CEO, has entered into an exclusivity agreement with a consortium led by Themes, a China-focused private equity firm, to work on a bid.
They have initially proposed to pay $4.25 per share in cash - a 23% premium on last Wednesday's closing price - for all outstanding shares of common stock. Ji currently owns about 13.99% of the common stock, either directly or indirectly.
Shares in China Natural Gas closed at $3.84 on Friday, having gained 10% since Wednesday's announcement. The stock is still trading down 30% year-to-date.
China Natural Gas provides natural gas for industrial, commercial and residential use, and claims to own and operate a 120-kilometer pipeline in the northern Chinese city of Xi'an.
Should the privatization deal go through, it would be the fourth Chinese company to de-list from US exchanges in the last year. Eight more firms are considering offers from management, often with private equity backing. Most recently, Harbin Electric's board approved a takeover bid by company management and Abax Global Capital.
Themes was set up by Kenneth Courtis and Frank Yu, and is reported to have raised a first fund worth $500 million. Last December, the firm was said be leading an consortium of investors in a $100 million takeover of Standard Water, a Beijing-based water treatment business.
Yu has previously served as a managing director at Och-Ziff Capital Management and Goldman Sachs. Courtis was formerly a managing director at Goldman Sachs Asia and before that chief Asia economist for Deutsche Bank.
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