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Sinopec, ENN in joint bid to control China Gas Holdings

By Gao Changxin (China Daily)

16:08, December 14, 2011

Sinopec, which has a natural gas pipeline network of 4,546 kilometers across China, expects a deal would quickly expand its share in the natural gas consumption market. Yu Ge / For China Daily

SHANGHAI - China Petroleum & Chemical Corp (Sinopec) and ENN Energy Holdings Ltd on Tuesday made a cash bid of up to HK$16.7 billion ($2.15 billion) for the control of China Gas Holdings Ltd.

A deal will help the two companies gain access to the Hong Kong-listed China Gas' natural gas distribution network in 20 of China's provinces and regions.

China Gas has 6.6 million residential customers and about 42,000 industrial and commercial users in the Chinese mainland.

In a statement, ENN and Sinopec said they will offer HK$3.50 a share for China Gas, 25 percent above the last close on Dec 6, before trading in China Gas shares was suspended.

The offer is priced at 11.29 times earnings before interest, tax, depreciation and amortization, compared with 10.95 times in 10 comparable deals, according to data compiled by Bloomberg.

ENN, the fourth-largest Hong Kong-listed gas supplier, will finance 55 percent of the deal and Sinopec will cover the rest.

China Gas this past month reported a fourfold gain in first-half profit, but the arrest of two senior executives caused the stock to slump this year.

China Gas resumed trading on Tuesday and surged 20.36 percent to close at HK$3.37.

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