Asia-based private equity firm PAG has waded into the battle to acquire Yingde Gases.

Whilst financial details remain closely guarded, the bid from PAG is said to be at the “top end of the range” that industrial gas giant Air Products and Chemicals, Inc. has already offered to purchase the Chinese outfit at.

Ousted directors Zhongguo Sun and Trevor Strutt entered into the legally-binding irrevocable memorandum of undertaking (MOU) with Bubbly Brooke Holdings Limited (BBH) and Baslow Technology Limited (BTL) to accept an offer that PAGACII-2 Limited (PAGAC), a subsidiary of buyout fund PAG Capital Asia, will make at a price not less than HK$6 ($0.70) per share in the company. 

A letter from Yingde said that its shareholders will still be able to accept other offers at a higher price provided it is 5% or more than the offer price, “which PAGAC may match if it wishes,” it added.

The offer is conditional only on acceptances being received that enable PAGAC to control over 50% of the share capital of the company. If the offer fails to become unconditional within 14 days after the closing date – 21 days after the despatch of the offer document – the MOU will lapse.

Initial intent

Air Products initially announced its intent to purchase all the outstanding shares of the China-based business in the second week of January in a preliminary, non-binding indication of interest.

Air Products’ attempt to takeover the Chinese outfit has been played out in a public war of words between the two parties, with Yingde also embroiled in an internal company feud between two groups of its founding shareholders and directors.

Yingde estimates that the preliminary conclusions will be decided at its extraordinary general meeting on 8th March.

Yingde is the largest independent industrial gas supplier in the People’s Republic of China in terms of revenue. It produces, supplies and distributes a variety of industrial gas products to its onsite and merchant customers, with oxygen, nitrogen and argon the core product.