This afternoon (January 3), rongchuang service (01516. HK) announced that it would terminate the acquisition of about 32.22% equity of first service Holdings (02107. HK).
The announcement shows that according to the controlling shareholder's share transfer framework agreement, due to the failure to reach a formal agreement on or before December 31, 2021, the controlling shareholder's share transfer framework agreement has been automatically terminated, and the management's share transfer agreement and CDH share transfer agreement have also been terminated.
screenshot of rongchuang service announcement
For the reasons for termination, rongchuang service said in the announcement that since the parties entered into the share transfer agreement on October 7, 2021, rongchuang service has immediately carried out due diligence on the first service holding, and the offeror has deposited all the funds required for the acquisition and the offer of RMB 2.267 billion into the account jointly supervised with the financial adviser.
During this period, contemporary real estate (China) Co., Ltd. (hereinafter referred to as contemporary real estate), a related party of first service holdings, issued the update of 12.85% senior notes due in 2021 on October 26, 2021 A series of announcements, such as 1. Possible impact of non payment of relevant funds on other financing arrangements; 2. Withdrawal of the proposal to pay interim dividends in 2021; and 3. Continued suspension of trading, and the appointment of financial advisers and continued suspension of trading, issued on November 5, 2021, mentioned that the relevant funds of contemporary real estate due notes have not been paid, As a result, it has caused (or may cause) it to accelerate the repayment of a number of other existing major financing arrangements and revoke the distribution of 2021 interim dividend.
The liquidity problem of contemporary real estate has directly caused significant uncertainty to the realizability and sustainability of the contemporary real estate business of the first service holding and the recoverability of the receivables of contemporary real estate.
Based on the above situation, rongchuang service has negotiated with the controlling shareholder seller on the adjustment and reduction of the transaction consideration according to the actual situation and the corresponding adjustment of the transaction arrangement. After the negotiation and adjustment, the controlling shareholder seller has expressed no objection in writing. However, on December 31, 2021, the seller, the controlling shareholder, suddenly overturned the consensus reached by both parties on the transaction consideration and relevant transaction arrangements, resulting in that the formal agreement could not be signed on the final termination date.
Previously, on November 1, 2021, rongchuang service and first service holdings issued a joint announcement, saying that on October 7, 2021, the offeror entered into a controlling shareholder share transfer framework agreement, a management share transfer agreement and a CDH share transfer agreement. According to these share transfer agreements, the offeror conditionally agreed to acquire a total of 322 million shares, accounting for about 32.22% of the total issued share capital of first service holdings on the date of this joint announcement, with a total consideration of about RMB 693 million and a consideration of RMB 2.15 per share.
Today, first service Holdings Limited announced that at the request of the company, the trading of the company's shares will be temporarily suspended on the stock exchange of Hong Kong Limited from 9:00 a.m. on Monday, January 3, 2022, pending the publication of insider information about the company and the announcement issued in accordance with the code on takeovers and mergers of companies.
As of today's close, rongchuang service's share price was HK $6.96/share, down 12.45%, with the latest market value of HK $21.47 billion.
(Daily Economic News)
