HNA Bid for Singapore’s CWT Said to Be Delayed on Deal Structure

Updated on
  • Acquisitive conglomerate weighs which entity will make offer
  • HNA has been in exclusive talks with CWT shareholder since May

HNA Group Co.’s potential bid for Singapore logistics provider CWT Ltd. has been delayed as the acquisitive Chinese conglomerate weighs changes to the deal structure, people with knowledge of the matter said.

The Chinese company, which has been in exclusive talks with CWT’s biggest shareholder since May, is still deciding which of its many entities will be used to make the offer, according to the people, who asked not to be identified as the details are private. HNA, the owner of China’s fourth-largest airline by market value, is a major shareholder in at least 10 listed companies, data compiled by Bloomberg show. 

The parties continue to be engaged in discussions and still hope to announce a transaction by the end of the year, the people said. Shares of CWT have risen 5.2 percent in Singapore trading this year, giving it a market value of S$1.21 billion ($873 million).

Chinese companies have announced a record $219 billion of overseas acquisitions this year as they seek to gain foreign expertise and cater to the nation’s increasingly affluent consumers. HNA said Monday it will buy a $6.5 billion stake in Hilton Worldwide Holdings Inc., adding to other recent purchases that include a $10 billion leasing business as well as golf courses, a baggage handler and an in-flight catering company.

Financing Talks

A Singapore-based spokesman for CWT and a Beijing-based spokeswoman for HNA Group declined to comment.

HNA has been in talks with lenders including RHB Capital Bhd. and Malayan Banking Bhd. on financing the potential CWT purchase, people with knowledge of the matter said in May. CWT, led by chief executive officer Loi Pok Yen, said this month that negotiations are still ongoing and there’s no certainty the talks will result in a definitive agreement. 

CWT said in August last year that its controlling shareholder was working with Credit Suisse Group AG and DBS Group Holdings Ltd. on a strategic review of its business and assets, which could lead to a deal involving the company. 

The company, founded in 1970, employs about 6,000 people and offers services including commodity logistics, freight forwarding, warehousing and defense procurement, according to its website. It also controls MRI Group Pte, a trader of base metals and petroleum products, and helps manage Cache Logistics Trust, which owns industrial property in Singapore, Australia and China.