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Hua Jian to take over Huabei Expressway
Posted on Friday, 16 June 2017 07:42
China Merchants Hua Jian Highway Investment (Hua Jian) is acquiring the remaining 73.2 per cent of Shenzhen Stock Exchange-listed Huabei Expressway.
The buyer is enticing the sellers with a CNY 4.54 billion (USD 667.68 million) stock swap offered at an implied price of CNY 5.69 per share, representing an 11.8 per cent premium to the target’s close of CNY 5.69 on 23rd June 2016, the last trading day prior to the deal being announced.
Hua Jian may alternatively purchase the remaining scrips in the toll road operator for CNY 3.58 billion in cash at CNY 4.49 apiece.
Established in 1999, Huabei was mainly tasked with building and operating the Beijing-Tianjin-Tanggu Expressway, which was previously approved by the Ministry of Communications and the State Economic and Trade Commission.
As at the end of 2016, the company owned total assets worth CNY 5.94 billion.
Huabei posted revenue of CNY 1.02 billion in the 12 months ended 31st December 2016, up 9.5 per cent on the CNY 932.67 million recorded in the previous year.
Net profit for the period totalled CNY 300.01 million, up significantly from CNY 135.80 million in 2015.
Another recently announced acquisition in the toll road operation sector is Atlantia’s EUR 16.34 billion takeover of Spain’s Abertis Infraestructuras.
The Italian company is seeking to expand outside its home country, where business growth has slowed in recent years.
As reported by Reuters, the combined entity, which is expected to yield about 60 per cent of its earnings outside Italy, will be Europe’s largest toll road company, with a market value of over EUR 36.00 billion.
There have been 39 announced or completed deals targeting road transportation support services providers so far this year, according to Zephyr, the M&A database published by Bureau van Dijk.
© Zephus Ltd