HNA Said to Be in Advanced Talks for $1 Billion CWT Takeover

  • Chinese conglomerate plans to offer about S$2.30 per share
  • Formal bid would come after nearly a year of exclusive talks

HNA Group Co. is in advanced talks about making a formal takeover offer for logistics provider CWT Ltd. after almost a year of exclusive talks, in a deal valuing the Singapore company at about S$1.4 billion ($1 billion), people with knowledge of the matter said.

The Chinese conglomerate is discussing a potential bid of around S$2.30 per CWT share, according to the people, who asked not to be identified as the negotiations are private. HNA may announce the offer within the next week at the earliest, though it hasn’t yet reached a final agreement on all terms of the transaction, the people said, asking not to be identified as the information is private. 

A bid of S$2.30 per share would represent a premium of about 12 percent to CWT’s Wednesday closing price of S$2.06. Details of the offer may change, and it’s possible the potential deal could still fall apart or be delayed, the people said. HNA plans to first buy a stake from CWT’s biggest shareholder, C & P Holdings Pte, which will trigger a takeover offer for the rest of the firm under Singapore listing rules, according to the people.

CWT shares, which rose as much as 1.5 percent Thursday, were up 0.5 percent in the afternoon session when the company suspended trading pending an announcement. Representatives for HNA and CWT didn’t immediately respond to requests for comment.

Swissport Purchase

HNA, one of China’s most acquisitive companies, started talks in May last year about buying a stake in CWT. The potential bid was delayed as the Chinese conglomerate deliberated which of its many entities would be used to make the offer, people with knowledge of the matter said in October. HNA operates airlines, hotels and tourism businesses and is pursuing an aggressive global expansion strategy that’s included everything from hotel chains to money managers.

A purchase would further strengthen HNA’s logistics operations, bringing it access CWT’s network of regional offices and partners across 90 countries from Peru to Kuwait. The Chinese company bought Swissport International Ltd., the world’s largest provider of ground and cargo handling services, last year for 2.7 billion Swiss francs ($2.7 billion).

CWT was founded in 1970 and employs about 6,000 people, according to its website. It offers services including commodity logistics, freight forwarding, warehousing and defense procurement.

C & P Holdings owns 31.9 percent of the company, according to CWT’s 2015 annual report. CWT Chairman Loi Kai Meng jointly controls the investment vehicle with CWT director Liao Chung Lik and businessman Lim Soo Seng. CWT Chief Executive Officer Loi Pok Yen, who is the chairman’s son, holds a 5.4 percent stake in the Singapore-listed company, the annual report shows.

— With assistance by Prudence Ho

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