China Merchants Port Holdings (CM Port) has rejected an offer to acquire all the issued H shares in Dalian Port (PDA) Company, claiming it wants to “reduce the vicious competition of ports in Northeast China”.
The unconditional cash offer was made by China International Capital Corporation Hong Kong Securities Limited on behalf of Broadford Global Limited, which is a wholly owned subsidiary of China Merchants Group, to acquire all the issued H shares in PDA.
Bai Jingtao, managing director of CM Port, stated: “The major reason for the non-acceptance of mandatory unconditional cash offer from Dalian Port was that China Merchants Group has majority stake control on Liaoning Port Group Company Limited with CMPort as the trusteeship.
“Through the integration and coordination of ports, we will help to reduce the vicious competition of ports in Northeast China. Through the rational allocation and utilisation of port resources, we will provide better support for the North-South synergy of CMPort’s port business.”
In June this year, Liaoning SASAC agreed to transfer 1.1% equity interest in Liaoning PG to Broadford. However, Broadford already held 21.5% H Shares of Dalian Port through CMPort, giving it a total of 68.37% of the total issued share capital of Dalian Port.
Under the relevant rules and regulations, Broadford was required to make a mandatory unconditional cash offer as a result for all outstanding H Shares.
For the first three quarters of 2019, CMPort’s container throughput volume recorded a steady growth of 1.8% to 82.09m teu. Volumes in mainland China increased by 2.2% while throughput in overseas regions was up by 3.1% year-on-year.