ENN Energy Holdings Ltd., the gas supplier bidding for China Gas Holdings Ltd., rose the most in almost seven weeks on speculation its decision to delay a notice to shareholders indicates it may not increase its offer.
The shares gained 3.9 percent to HK$26.65 at the close in Hong Kong, the most since Jan. 13. The stock has gained 7 percent this year, compared with an 18 percent gain in the benchmark Hang Seng Index. China Gas was unchanged at HK$ 3.73.
China Gas, which distributes natural gas in 20 provinces of the nation, rebuffed a HK$15.3 billion ($2 billion) hostile takeover offer by ENN and China Petroleum & Chemical Corp. on Dec. 14. South Korean investment group SK Holdings Co. and Fortune Oil Plc increased their stakes in the company since December, filings with the Hong Kong Securities and Futures Commission showed.
“The acquisition will face difficulty in going forward, as the consortium cannot raise the offer price too high or it will be difficult to get approval from ENN’s shareholders,” Nomura Equity Research analysts Joseph Lam and Ivan Lee wrote in a note yesterday. “China Gas shareholders, on the other hand, will not accept the offer if they cannot receive a decent return.”
ENN will send shareholders a notice about the acquisition by March 31 because the company needs more time to prepare the information and complete its financial results for the year ended Dec. 31, according to statement to the stock exchange yesterday.
ENN shares have risen 1 percent, while China Gas gained 11 percent since the offer was announced by ENN on Dec. 13.