Hutchison Telecom has proposed to take Hutchison Global Communications Holdings Limited (HGCH) private.
The deal is subject to a number of conditions, including the approval of HGCH's independent minority shareholders. If these conditions are met, HGCH will become a wholly owned subsidiary of Hutchison Telecom and will be delisted from the Stock Exchange of Hong Kong.
Under the proposal, Hutchison Telecom would acquire and cancel all of the shares it does not already hold in HGCH, through a scheme of arrangement.
HGCH shareholders would have two options. They can exchange 21 HGCH shares for two shares in Hutchison Telecom, valuing HGCH shares at HK$0.705 cents each based on Hutchison Telecom shares' last traded price in Hong Kong of HK$7.40. Or investors can receive HK$0.65 in cash for each HGCH share.
The benefits of the transaction include allowing HGCH investors to swap into shares of Hutchison Telecom, a larger and more diversified company, whilst maintaining an exposure to the HGCH business. It also gives HGCH shareholders the opportunity to take cash at an attractive premium to recent HGCH share trading levels.