① For this tender offer, Huinenghaitou has offered a higher premium, and if the entire tender offer is completed, Huinenghaitou will spend 9.698 billion yuan on it.② There is significant uncertainty in this tender offer due to the acquirer's suspected failure to disclose the relationship of consistent actors and others.③ In the past two months, Huineng Group has made three moves, with a total expenditure of nearly 13 billion yuan, and all of them are targeting overseas mineral resources.
Caixin News Network, August 24 (Reporter Wang Bin) ST New Tide (600777.SH), which has been in continuous internal conflicts, may welcome a new controlling shareholder, the "coal tycoon" Guo Jinshu from Inner Mongolia and his controlled company, Huineng Holdings Group Co., Ltd. (referred to as "Huineng Group").
It is worth noting that due to the alleged violation of laws and regulations such as failing to truthfully report the relationship with consistent actors and the actual shareholding situation by the acquirer Beijing Huinenghaitou New Energy Development Co., Ltd. (referred to as "Huinenghaitou") and the need for this tender offer to pass the review of the Committee on Foreign Investment in the United States, there is significant uncertainty.
Willing to pay a high premium to acquire ST New Tide.
On the evening of August 23, ST New Tide announced that Huinenghaitou will conduct a partial tender offer to all shareholders of ST New Tide except itself, with a planned acquisition of 3,128,228,100 shares, accounting for 46% of ST New Tide's total share capital. The tender offer price is 3.1 yuan/share, and the tender offer period is a total of 30 days. Based on this calculation, if the entire tender offer is completed, Huinenghaitou will spend 9.698 billion yuan on it.
Caixin News Network reporters noticed that Huinenghaitou has offered a higher premium for this tender offer. Compared with the closing price of ST New Tide at 1.84 yuan/share on August 22, the premium exceeded 68%.
Huinenghaitou's move is aimed at acquiring control of ST New Tide. The announcement shows that before launching the tender offer, Huinenghaitou had already held 4.99% of the shares of ST New Tide. If the tender offer is completed, its direct shareholding ratio will reach 50.99%.
Currently, ST New Tide is in a "no owner" state. According to the first quarter report, the current largest shareholder of the company holds a stake of only 6.39%, and the total stake held by the top ten shareholders is 38.28%. In April of this year, due to the accounting firm issuing a negative opinion on the company's "Internal Control Audit Report," the company's stock was also subject to other risk alerts.
ST Xinchao's main business is the exploration, development, and sale of petrochemicals and natural gas, with 99.9% of its assets and operations in the USA. Due to its oil and gas assets in North America, ST Xinchao is described as a "U.S.-listed Chinese company." In the first quarter of this year, the company achieved a revenue of 2.135 billion yuan, a year-on-year increase of 6.64%, and a net profit of 0.613 billion yuan, a year-on-year decline of 3.47%.
Whether the tender offer acquisition takes effect still depends on confirmation 30 days after the full announcement of the "Tender Offer Report" (If the planned expiration date is a non-trading day, it will be extended to the next trading day).
Inner Mongolia's "coal giant" Guo Jinshu
Tianyancha data shows that Hui Nenghaitou was established in April 2023 with a registered capital of 20 million yuan. The legal representative is Guo Jianjun, a wholly-owned subsidiary of Hui Neng Group.
According to the official website, Hui Neng Group was established in 2001 and is a large-scale private enterprise with coal, electricity, and petrochemicals as its main business, integrating logistics, finance, real estate, roads and bridges, and water affairs. In 2023, the group achieved a total sales revenue of 68.2 billion yuan, ranking 240th in China's top 500 private enterprises.
According to Kpophui News, in Ordos, Hui Neng Company is regarded as one of the coal production giants alongside the central state-owned enterprise Shenhua Group and the private enterprise Yitai Group. Its current chairman is Guo Jinshu, who previously served as the director of the city's coal bureau and is a recognized "coal giant" in Inner Mongolia.
Guo Jinshu is also the largest individual shareholder of Hui Neng Group. In the 2024 Hurun Global Rich List, Guo Jinshu ranks 1274th with a wealth of 20 billion RMB.
Cailian Press noted that in the past two months, Guo Jinshu has been active in the capital markets. In July of this year, Hui Neng Group acquired 100% of the shares of the Australian company Primary Gold, the king of rare earths in China, for 1.47 billion yuan. On August 1st, Hui Neng Group sought to acquire 9% of the shares of Asia Potash International for 1.466 billion yuan. The latter's core assets are potash and potassium mines in Laos.
In addition to the current tender offer to acquire ST New Tide, Huineng Group has made three moves, spending nearly 13 billion yuan in total, all aimed at overseas mineral resources.
Tender offer acquisitions have hidden concerns.
It is worth noting that in the announcement, ST New Tide mentioned: The company recently received investor complaints and reports, claiming that Huinenghaitou did not truthfully report the situation of concerted action parties and actual shareholding, which may involve suspicion of illegal acts, and provided relevant evidence.
"As it is a report made by a real-name whistleblower, this situation may have an adverse impact on the acquirer. Whether this tender offer acquisition can succeed depends on the stage of the acquisition progress, the fulfillment of both parties in the acquisition, and other factors that may lead to the termination of the acquisition." Wu Sihua, a lawyer from Zhejiang Junan Century Law Firm, told Caijing reporters.
ST New Tide stated that the board of directors has started to investigate and verify the qualifications, credit status, and acquisition intentions of Huinenghaitou in accordance with Article 32 of the "Management Measures for the Acquisition of Listed Companies". The latter stated through email on the evening of August 22 that "besides the disclosed situation, there is no situation where other concerted action parties hold shares in your company."
"Based on Article 6, Article 13, Article 76 of the 'Management Measures for the Acquisition of Listed Companies,' the company has reasonable doubts and significant concerns about Huinenghaitou's tender offer behavior. The progress of this tender offer may face some uncertainties, and there is a risk that the tender offer may be suspended or terminated according to law." ST New Tide said.
On the same day, the Shanghai Stock Exchange issued a regulatory letter to ST New Tide, stating, "Please check whether Huinenghaitou and related shareholders constitute concerted action parties, whether Huinenghaitou is prohibited from acquiring listed companies in accordance with relevant provisions such as Articles 6 and 83 of the 'Management Measures for the Acquisition of Listed Companies'. Also, verify whether there are overseas review-related risks as indicated in the announcement, whether they affect this tender offer acquisition. Please have financial advisors and lawyers provide clear opinions in accordance with the 'Management Measures for the Acquisition of Listed Companies.'"
According to the announcement, ST New Tide consulted American lawyers on this tender offer matter. The lawyers believe that the Committee on Foreign Investment in the United States (CFIUS) has the right to review the transaction, and the acquirer must proactively report and obtain approval from CFIUS for this tender offer and related changes, otherwise the company's existing business in the US will be significantly affected. There is considerable uncertainty in the CFIUS review process and conclusion.
