HONG KONG, December 3, 2008 – O’Melveny was brought in by Citigroup to represent GST Holdings Ltd (GST) as its mergers and acquisitions counsel in a takeover bid from United Technologies Far East Limited (UTFE) for all of GST’s outstanding shares and options, other than the shares already held by UTFE.
The offer price was HK$3.38 per ordinary share and HK$0.58 per outstanding option. This represents a 94 % premium over the average closing price for the last 30 trading days as of November 7, 2008. The total consideration payable by UTFE to complete its takeover bid is approximately HK$1.93 billion or US$247 million.
The GST Controlling Shareholder, GST International Management Ltd (GSTI), which owns 53.43 % of GST, has executed an irrevocable undertaking to accept the bid. The making of the bid is conditioned on obtaining the applicable regulatory approvals or consents, including the relevant People’s Republic of China (PRC) antitrust filings. In addition, the bid will be conditional on UTFE attaining acceptance by at least 90 % of the disinterested shares in GST, which would allow UTFE to privatize GST by exercising its compulsory acquisition rights under the relevant laws of the Cayman Islands.
That the bid is structured as a voluntary offer enables GSTI to tender its shares as a disinterested shareholder, and the shares to be tendered will go a long way to fulfill the
90 % acceptance lever.
In Hong Kong, the O’Melveny team was led by partner Colin Law and counsel Peter Chen. They were assisted by Mark Chan and Jennifer Ng. Nathan Bush and Faye Zhou advised on the antitrust aspects of the transaction. Citigroup acted as the financial adviser to GSTI on the bid.
GST is a leading producer of fire alarm systems in the PRC. It produces fire alarm network systems and electric power meters and offers installation services for such systems and meters on a nationwide scale, with approximately 35 % market share in the country. UTFE is a wholly-owned subsidiary of United Technologies Corporation, a multinational conglomerate with a leading fire and security business globally.
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