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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