Hanergy Mobile Energy Holding Group announced plans of taking Hanergy Thin Film Power Group private and then relisting the stock in mainland China.
In a statement released on Oct. 23, Hanergy Mobile Energy said it would offer at least $0.64 for each share in an aim to "protect the interest of middle and small shareholders." The firm said it arrived at the decision since Hanergy Thin Film has been suspended from trading for more than three years. The company decided to issue the buyout offer to all the investors of the listed company, the statement read.
The firm said it sent its offer to Hanergy Thin Film on Oct. 12. The latter responded on Oct. 18, saying that board members unanimously voted yes to the privatization offer.
The offer from Hanergy Mobile Energy would give the Hanergy Thin Film valuation of at least $27 billion according to Reuters.
Hanergy Thin Film was once worth more than Twitter during its peak. The stock traded at HK$7.88 per share with a market value of about $40 billion. The stock had last traded HK$3.91 before its suspension, wiping nearly 50 percent off its market value to $21.1 billion.
The stock lost its worth back in May 2015 after a Hong Kong court ruled that former chairman, Li Hejun, was guilty of misconduct along with other four directors. The executives were found to have misled shareholders.
Li used to be China's richest man in 2015 with a net worth of $26 billion. Now, he is the country's 89th richest Chinese with an estimated net worth of $4.34 billion according to the Hurun Report 2018.
Commenting to privatization offer from Hanergy Mobile Energy Holding Group, Tian Miao, an analyst at Everbright Sun Hung Kai, told Bloomberg the offer looks "reasonable." The small shareholders, indeed, would benefit from the offer as it at least provides them with a premium over the stock's last price. The offer would also relieve them from the controversy with some compensation to boot, the analyst said.
Tian Miao added that the approval from Hanergy Thin Film of the offer means that Hanergy and Hong Kong regulators could now move forward from the controversy.
Christopher Cheung Wah-fung, a veteran stockbroker, echoed the same opinions. He told South China Morning Post that the price offered by Hanergy Mobile Energy per share was practical, especially to small investors. They could at least get some cash from their prior investments which would otherwise go down the drain if the stock remains suspended in Hong Kong.
