Oct. 11 (Bloomberg) -- Beijing Enterprises Holdings Ltd., controlled by the city government of China’s capital, cut the amount it will pay for its parent’s stake in China Gas Holdings Ltd. by 10 percent to reflect a drop in the target’s share price.
Beijing Enterprises Holdings will pay Beijing Enterprises Group HK$7.4 billion ($954 million), or HK$7.02 a share, for a 22 percent stake in China Gas, according to a Hong Kong stock exchange filing yesterday. The company previously promised to pay HK$8.22 billion, or HK$7.80 a share.
The company said the new deal terms are “fair and reasonable” given the prevailing market price of China Gas’s shares. It didn’t elaborate. The supplier of natural gas to 184 Chinese cities has fallen 5.8 percent to HK$8.40 in Hong Kong trading since Beijing Enterprises Holdings disclosed the planned investment on July 30.
Beijing Enterprises said it will reduce the number of new shares it will issue to the parent as payment to 98.1 million from 113.1 million, leaving the cash payment unchanged. In July, the company said it would pay HK$2 billion in cash.
Following the transaction, Beijing Enterprises Holdings will be the biggest shareholder in China Gas, according to data compiled by Bloomberg. The parent increased its stake in China Gas last year after China Petroleum & Chemical Corp. and ENN Energy Holdings Ltd. made a takeover offer for China Gas.
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