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ENN shares soar on view China Gas deal may fail
Release Time:2012-6-4
Shares of ENN Energy Holdings Ltd jumped more than 6 percent on Thursday after the Chinese city gas distributor and Sinopec Corp reiterated their pre-conditional offer of HK$3.50 per share for rival China Gas Holdings, fuelling investor expectations that the deal would fail.

Shares of ENN had gained 6.1 percent to HK$29.7 as of 0518 GMT on Thursday. The stock had been weighed down by investor concerns that ENN and Sinopec would have to raise their offer and that such a move would hurt ENN's finances, analysts said.

Late on Wednesday, ENN released a statement on the proposed offer for China Gas, saying the offer price remained unchanged at HK$3.50 per share, and it would hold an extraordinary general meeting on July 6 to vote on the acquisition.

"Without a raised offer, even if the pre-conditions are fulfilled, chances of deal success falls," Credit Suisse said in note to clients on Thursday.

China Gas late last year received an unsolicited $2.2 billion takeover offer from a consortium 45 percent held by Sinopec and 55 percent by ENN Energy. China Gas rejected the offer, saying it failed to reflect the true value of the company.

China Gas shares were down 2.35 percent at HK$3.74 per share in early afternoon trade on Thursday.

Analysts have said the deal is unlikely to be completed at HK$3.5 per share given China Gas shares were currently trading above HK$3.7 each.

Some of China Gas's key shareholders - Chinese businessman Liu Ming Hui, Fortune Oil and SK Holdings - had been increasing their stakes in the company at above the offer price in the past few months to about 35 percent combined.
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