China Gas: Shares Suspension Due to Natural Gas, Liquefied Petroleum Gas Agreements

   By Yvonne Lee 
 

HONG KONG--Shares of China Gas Holdings Ltd. (0384.HK), a target of a takeover proposal by ENN Energy Holdings Ltd. (2688.HK) and state oil giant China Petroleum & Chemical Corp. (SNP), or Sinopec, were suspended from trading Monday morning after it signed cooperation agreements for the expansion of its natural gas and liquefied petroleum gas businesses.

China Gas President Eric Leung told Dow Jones Newswires the suspension wasn't related to the takeover proposal by the two energy companies and the company will issue a statement on this matter later. However, he declined to give more details.

China Gas, which controls gas pipelines that serve more than six million customers in China, said Monday morning the suspension was due to an announcement "which is price sensitive in nature." The stock closed Friday at HK$4.30 per share.

In September, ENN Energy and Sinopec extended to today the deadline for the completion of negotiations on their $2.15 billion planned acquisition of China Gas.

The acquisition faces an uphill struggle as major shareholders of China Gas--including Fortune Oil PLC (FTO.LN), founder Liu Ming Hui and Beijing Enterprises Group Co.--have been increasing their holdings in the company since ENN Energy and Sinopec launched their takeover attempt in December.

Gaining a controlling stake in China Gas--which has a market capitalization of $2.2 billion--won't be cheap. But the jockeying for control of the company highlights the industry's view that China Gas, which has exclusive rights to operate pipelines in 151 cities across China, is worth the effort.

Write to Yvonne Lee at [e-mail]

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