AsiaSat is owned by China’s CITIC and private equity fund Carlyle Group. Having been listed for years on the Hong Kong stock exchange, it is to convert into a privately-held company.
In essence, the company is owned by Bowenvale Ltd, a BVI-registered entity that controls 74.43 per cent of AsiaSat stock. CITIC and Carlyle own Bowenvale 50/50.
AsiaSat cites the low liquidity of shares in free float, plus the cost of its annual listing on the Hong Kong exchange as well as the obligations of public half-yearly disclosures as being behind the move.
AsiaSat’s owners are offering a tempting 31.46 per cent premium (of HG$10.22 per share) to minority shareholders, which – in an all-cash transaction – will cost HK$1.053 (about $134.8m). When taken over the past year the amount on the table represents a juicy 70.96 per cent premium over the period’s average share price.
“The company remains cautiously optimistic about revenue prospects for 2019 and beyond for the core business,” Bowenvale and AsiaSat said in their announcement to shareholders.
“However, in order to better adapt to a rapidly changing business environment and to position itself for potential areas of growth, such as regional demand for network connectivity including maritime and remote communications, the company may be required to consider changes to corporate strategy and/or business model to effectively compete in the current marketplace and generate future growth. Such potential changes will have inherent execution risk and may also create volatility to the company’s financial and earnings profile. The company may also be required to further invest in adapting its business model, which may require further debt or equity funding to be raised.”