One thing that distinguishes Hong Kong and Singapore from the rest of the region is the vigour with which they uphold their takeover codes. And thus with Sun Hung Kai's ownership of Hong Kong mobile operator, Smartone breaching 30%, it has been forced to make a general offer.
ING has been appointed as independent financial advisor to the independent directors on the board, and will give a verdict by December 17 as to whether minority shareholders should accept the offer. Sun Hung Kai is offering to purchase stock at HK$8.25 per share, which is a discount to the closing price on Friday of HK$8.80.
Its offer lapses at the end of December, unless it gets more than 50%. Of course, ING's opinion will be most interesting to BT (British Telecom) which is the second largest holder of Smartone stock.
If it were to accept Sun Hung Kai's offer it would receive $130 million. Last year BT sold out of its stake in Maxis, and it has been known to be keen to sell out of all its Asian stakes. In this respect, it might be assumed that this would be an opportune time to get out of Smartone.
Should ING deem the offer fair and reasonable it would be able to more easily justify the move to its own shareholders. However, should ING deem the valuation inappropriate, BT may find a sale less palatable - in terms of justifying it to its own shareholders. Traditionally, BT has been advised by Merrill Lynch on it sale of stakes in Asia, but it is not clear whether it is being advised by Merrill on this occasion.
