On March 26, 2025, ENN Natural Gas Co., Ltd. (SHSE: 600803) (ENN-NG) announced its intention to privatize ENN Energy Holdings Limited (HKSE: 2688) (ENN), a 34.28% controlled subsidiary of ENN-NG, by way of a scheme of arrangement. The proposed transaction values each ENN share at approximately HK$80 and all shares of ENN at approximately HK$90.5 billion ($11.6 billion).
The privatization proposal is structured as a securities exchange offer with cash consideration. Xinneng (Hong Kong) Energy Investment Limited (Offeror), a wholly owned subsidiary of ENN-NG, acts as the offeror under the privatization proposal. Shareholders of ENN (other than the Offeror) will receive H shares to be issued by ENN-NG and cash consideration from the Offeror for every ENN share being cancelled under the privatization proposal. As part of the transaction, ENN-NG will make a concurrent application for the listing of its H shares on the Hong Kong Stock Exchange, thereby becoming dual-listed on both the Hong Kong Stock Exchange and the Shanghai Stock Exchange.
ENN-NG is primarily engaged in obtaining upstream natural gas resources, LNG terminals, natural gas downstream distribution, energy engineering and energy chemical business in the People’s Republic of China (PRC).
ENN is one of the largest clean energy distributors in the PRC and is principally engaged in the natural gas downstream distribution, including investment in, and the construction, operation and management of, gas pipeline infrastructure, and the sales and distribution of piped gas, liquified natural gas (LNG) and other multi-energy products in the PRC.
Upon the implementation of the privatization proposal, ENN is expected to achieve a comprehensive upstream-to-downstream industry chain integration within the enlarged ENN-NG group.
The making of the privatization proposal and the proposed listing of the H shares of ENN-NG are subject to regulations in Hong Kong, PRC and the Cayman Islands.
This representation follows the S&C team’s work advising on Guangzhou Automobile’s privatization of Denway Motors in 2010 and Haier Smart Home’s privatization of Haier Electronics Group in 2020, each involving a novel transaction structure of privatization and a concurrent new listing.
The S&C team advising ENN-NG and the Offeror on the privatization proposal (including the financing thereto) and the proposed Hong Kong listing of ENN-NG is led by Kay Ian Ng and Gwen Wong and includes Tracy Li, Rosana Tse, Bella Wang, Bebe Shing, Wan Mengli and trainee solicitor Tia Zhou. Joon Seok Hong provided valuable contributions as to U.S. securities laws.