BIZCHINA / Overseas Investment
US firm Eaton Corp bids for Senyuan
By Wang Xu (China Daily)
Updated: 2006-08-24 09:06
Eaton Corp, a US-based diversified industrial manufacturer, said
yesterday it plans to pay up to US$63.6 million to acquire a Chinese
electrical company to speed up its expansion in the nation's electrical
equipment market.
The US-based company has offered HK$1.49 (19 US cents) per share for
Senyuan International Holdings Ltd, a Hong Kong-listed electrical
equipment maker.
Eaton also agreed to increase the price to HK$1.62 (21 US cents) per
share if it receives approval for 90 per cent or more of Senyuan's
outstanding shares.
The higher offer will put Senyuan at a price of US$63.6 million,
representing a premium of 20 per cent over the average closing price of
its last 30 trading days.
The offer is also 37.3 per cent higher than the Senyuan share issue price
of HK$1.18 (15 US cents).
Senyuan International suspended trading in its shares from Monday,
pending an announcement in relation to a voluntary conditional cash offer.
Eaton said it had received irrevocable commitments to accept the offer
from holders of 75 per cent of the outstanding Senyuan shares.
The offer will be made through financial adviser DBS Asia Capital Ltd.
"The acquisition of Senyuan will strengthen our medium-voltage electrical
business by providing us with local channel access to the fast-growing
China market and to an important manufacturing base for medium-voltage
electrical products," said Randy Carson, senior vice-president of Eaton
Corp.
Senyuan, located in East China's Jiangsu Province, makes vacuum circuit
breakers and other electrical switchgear components. It had 374 million
yuan (US$47 million) in sales in 2005.
Senyuan is ranked as the third-largest domestic low-voltage equipment
maker in the sector in 2005 in terms of total output, the company said on
its website.
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