According to the Zhitong Finance App, Aoyou (01717) and the offender Hong Kong Golden Port Trading Holdings Limited jointly announced that on October 27, 2021, the offender entered into a share purchase agreement with the seller group. According to the share purchase agreement, the offeror intends to purchase approximately 531 million shares from the seller, accounting for about 30.89% of the company's total issued share capital on the date of this joint announcement. The total cost is approximately HK$5.34 billion, or HK$10.06 per share sold.
On the same day, the offeror entered into a subscription agreement with the company. The company conditionally agreed to the issuer to issue 90 million new shares, accounting for 5.24% of the total number of shares issued on the date of this joint announcement and 4.98% of the total number of shares issued after the expansion of issued and distributed subscribed shares. The total subscription price was HK$905.4 million (that is, HK$10.06 of each subscribed share).
As of the date of this joint announcement, none of the Offeror or its acting in concert owned any shares (or had control or direction over any of the shares). Upon completion, the offeror will have an interest in a total of about 621 million shares at that time, accounting for about 34.33% of the company's voting rights based on the company's total issued share capital after the expansion of issued and allotted subscribed shares.
According to Rule 26.1 of the Takeovers Code, upon completion, the Offeror will be required to make a mandatory conditional cash offer for all issued shares (excluding those already owned and/or agreed to the acquirer by the Offeror and its co-actors). According to Rule 13 of the Takeovers Code, the offeror will make an appropriate cash offer to the holder of the offering right to cancel all offered shares. Each offered share was HK$10.06 in cash, about 13.67% of the share's closing price of HK$8.85 per share reported on the Stock Exchange on October 11, 2021. The offer price for share options is set at HK$0.06 as a pivotal price.
If no share option is exercised before the end of the offer, the cost payable under the share offer would be approximately HK$7.54 billion and the cost of cancelling all share options under the share option offer would be approximately HK$2 million, taking into account irrevocable undertakings and assuming that the offer was accepted in full. The maximum value of the offer will be approximately HK$7,542 million.
A share offer may only be made after the relevant number of offered shares have been effectively accepted, and the relevant shares, together with the offeror and its concerted persons, have owned, acquired or agreed to be acquired prior to or during the share offer will allow the offeror and its concerted actors to hold more than 50% of the company's voting rights. An offer of share options will not be realized until the offer of shares has been made in all respects or has been declared unconditional.
Furthermore, the company has applied to the Stock Exchange for shares to resume trading on the Stock Exchange starting at 9:00 a.m. on October 28, 2021.
The announcement said that the subscription matters were combined with the transactions to be carried out under the share purchase agreement to introduce new shareholders who occupy important market positions for the company. The company believes that the offeror and the company will benefit from business cooperation in the long run. In addition to this, the subscription event also provides the company with an opportunity to raise additional capital to strengthen the Group's financial position and expand its capital base, thereby benefiting the company financially, which is critical to the Group's future development.
According to reports, Jingang Trading is a company incorporated in Hong Kong that mainly engages in investment and trade business. The company is wholly and profitably owned by Erie Shares (600887.SH). Yili Co., Ltd. is mainly engaged in the processing and production of dairy products in China.
The offeror agreed with the company's strategy, culture, team and business, and will continue to support the company's independent operation and maintain the company's listing position in the Hong Kong capital market. The Offeror intends for the company to continue to focus on developing its existing business. The Offeror does not intend to make any material changes to the Group's existing operations and business after the Offer expires.