HK has to pore over cement deal that came unstuck

West China Cement

04/07/2016 04:59

(The author is a Reuters Breakingviews columnist. The opinions 
expressed are his own.) 
    By Quentin Webb 
    HONG KONG, July 4 (Reuters Breakingviews) - West China 
Cement shares crashed just before a takeover by rival Anhui 
Conch fell over. That suggests the news leaked somehow. Hong 
Kong regulators have already clamped down on insider trading, 
long seen as a big problem in the territory. A fast, thorough 
investigation is needed. 
        
    Full view will be published shortly. 
     
    CONTEXT NEWS 
    -  China's Anhui Conch Cement will not pursue a planned 
takeover of smaller rival West China Cement, the two companies 
said after the market closed on June 30. 
    - In a joint statement to the Hong Kong stock exchange, the 
cement firms said various requirements had not been fulfilled 
before the deal's deadline, or "long stop date", including 
"approval of the transaction by commerce authorities" in China.  
    - "Conch Cement and West China Cement will continue to 
explore future opportunities for business collaboration in 
different structures or manners," they added. 
    - West China Cement's Hong Kong-listed shares crashed on 
July 4, the first trading day after the statement. By 11:30 a.m. 
Hong Kong time (0330 GMT) they stood 24 percent lower at 
HK$0.81.  
    - The shares had fallen 33 percent on June 28, before West 
China Cement applied for a trading halt ahead of an announcement 
about the deal. 
    - In November, Anhui Conch agreed to increase its stake in 
West China Cement from 21.2 percent to at least 51 percent, by 
swapping four businesses for West China Cement shares valued at 
HK$4.6 billion ($592 million). The deal would have also 
triggered a mandatory offer to buy the rest of the target's 
shares. 
    - Breakingviews could not immediately reach Anhui Conch or 
West China Cement officials for comment. 
    - West China Cement statement: http://bit.ly/29g1suc  
 
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    - For previous columns by the author, Reuters customers can 
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 (On Twitter https://twitter.com/qtwebb Editing by Peter Thal 
Larsen and Katrina Hamlin Additional reporting by Kathy Gao) 
 ((quentin.webb@thomsonreuters.com;)(Reuters 
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Keywords: WEST CHINA CEMENT ANHUI CONCH/BREAKINGVIEWS