Clifford Chance

Sponsor-led take privates in Hong Kong – a partial alternative?

29 October 2012

Publicly listed companies which are trading at a discount to their true market value have proved a valuable source of transactions for private equity sponsors in a number of jurisdictions around the world, notably the US, UK, Singapore and Australia.  However, in Hong Kong, otherwise an open and generally very "deal friendly" environment, this is definitely not the case.  A combination of the shareholder dynamics in companies listed on the Hong Kong Stock Exchange (where the majority of companies have significant controlling shareholders) and a focus by the regulator and regulations on protecting minority shareholders (as evidenced by the 10% dissenting shareholder rule on schemes of arrangement not found in other jurisdictions ) has resulted in there not being a single successful sponsor-led take private of a Hong Kong listed company to date.

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