EVENTS
Richards Butler, Sidley Austin, Conyers Dill & Pearman, Linklaters Why: Deal inolved Road King Infrastructure entering into a S&P agreement to acquire a new residential property site in Dongcheng District of Beijing, with a total gross floor area of around 59,000 sqm. Total consideration and the estimated cost of relocation is about RMB500 million.Upon the completion of the acquisition, Road King has four property development projects in Beijing, contributing an aggregate gross floor area of around 560,000 sqm.
Equity Market Deal of the Year FINALISTS ALIBABA.COM IPO Firms: Fangda Partners, Freshfields, Sullivan & Cromwell, Maples & Calder, Haiwen & Partners, Slaughter & May, Simpson Thacher & Bartlett Banks: Goldman Sachs, Morgan Stanley, Deutsche Bank Why: Alibaba.com Limited, the leading B2B e-commerce company in the PRC, completed its initial public offering, raising gross proceeds of approximately US$1.7bn. This is the second largest IPO ever by an Internet company worldwide. The IPO consisted of a Rule 144A offering in the US, a Regulation S offering outside the US and a public offering and listing in Hong Kong. Unlike most other initial public offerings by Internet companies in China, this was a truly novel transaction as it was the first IPO and Hong Kong listing by a B2B e-commerce company in China, and many of the legal, regulatory, disclosure and other issues that arose in the course of the transaction were questions of first impression.
BOQI TOKYO LISTING Firms: Mori Hamada & Matsumoto, Guantao Law Firm, Anderson Mori & Tomotsune, Zhong Lun
Banks: Daiwa Securities SMBC Why: This deal sees Boqi become only the second PRC firm to list in Japan and the first PRC firm to list on the first section of the main board of the TSE, and first non-Japanese company to list on main board of TSE.
CITIC BANK IPO Firms: King & Wood, Skadden, Commerce & Finance, Freshfields Banks: Citigroup, HSBC, Lehman Brothers, Merrill Lynch Why: This deal was about much more than only the second A then H listing by a bank in the PRC. It also involved negotiating issues without the guidance of precedents include the simultaneous purchase by BBVA of the shares of CITIC Bank and CIFH, an agreement between CITIC Bank and BBVA on stock option arrangement, and the need for advice on how to avoid competition between CITIC Bank and CITIC Ka Wah Bank, a subsidiary of CIFH.
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ISSUE 5.3
CHINA AGRI-INDUSTRIES HOLDINGS INTRODUCTORY LISTING Firms: King & Wood, Herbert Smith, Commerce & Finance, Freshfields Banks: Goldman Sachs Why: This deal was the first listing of a RedChip company by way of spinning-off and involved approvals from SASAC, CSRC and the state council. The differing legal requirements of mainland PRC and HK were difficulties of the first instance.
PETROCHINA COMPANY A SHARE LISTING Firms: King & Wood, Shearman & Sterling, Jingtian & Gongcheng, Freshfields Banks: Citic Securities Limited, UBS Securities, China International Capital Corporation Why: The proceeds netted from the A share issue mean it is the largest ever A-share IPO and the largest IPO of 2007 in terms of proceeds. Some of the difficulties associated with such a large transaction are different disclosure requirements of A and H shares in different jurisdictions and the wide scope of due diligence.
COSCO A SHARE OFFER AND PLACEMENT Firms: Commerce & Finance, Fangda Partners Banks: China International Capital Corporation Why: This was the first time that a placing was approved to take place shortly after the A share public offering. It was also the first time a placing involving a material acquisition by a listed company was approved by CSRC’s Material Restructuring Committee after the hearing procedure.
M&A Deal of the Year FINALISTS ICBC & BANK HALIM Firms: Baker & McKenzie (incl Indonesian member Hadiputranto Hadinoto & Partners), Makes & Partners Banks: China International Capital Corporation, Bank Halim Indonesia Why: The deal represents the first time that ICBC has entered the overseas market via acquisition and its first takeover of foreign bank outside Greater China China’s. ICBC has option to purchase the remaining 10% in Bank Halim in three years although the deal itself remains subject to approval by the China Banking Regulatory Commission and Indonesia’s central bank.
CHINA INVESTMENT CORPORATION INVESTMENT IN MORGAN STANLEY Firms: Sullivan & Cromwell, Davis Polk & Wardell Banks: Morgan Stanley Why: This was one of the highest-profile transactions anywhere, of any category, in 2007. This was a ground-breaking investment by a Chinese state-owned entity for a significant stake in a major global investment bank. The transaction required
the development and structuring of complex financial instruments and was executed within an extraordinarily expedited timetable – less than three weeks from legal counsel’s initial involvement to the closing. The result was a deal reported to be the largest private/ strategic investment by a Chinese state-owned entity in a single company in the United States.
CARLYLE INVESTMENT IN CHINA PACIFIC Firms: King & Wood, Fangda, Linklaters Banks: Merrill Lynch, China International Capital Corporation Why: This deal involved a swap of Carlyle’s previous US$400m investment in China Pacific Life Insurance, a subsidiary of CPG, into the parent company. As at the date of the deal it was the largest private equity investment in PRC.
COSCO ASSETS ACQUISITION Firms: Commerce & Finance, Fangda, Paul Hastings, Zong Heng Banks: China International Capital Corporation Why: This deal represents the largest ever acquisition by a PRC listed company using shares as consideration.
SEB INTERNATIONAL SAS ACQUISITION IN SUPOR Firms: Gide Loyrette Nouel, Llinks, Chen & Co. Banks: Calyon (France), CLSA (Hong Kong), Guosen Securities Why: This deal represents one of the first direct acquisitions of a PRC listed company by a foreign company and the first direct acquisition of a controlling interest in an A-shares listed company. It is also one of the first anti-monopoly investigations cleared by the MOFCOM for this type of transaction. In addition, it is the first deal ever that has adopted a partial tender offer launched by a foreign company in the PRC market. This meant that the deal involved a very innovative acquisition structure, using a complex scheme encompassing transfer by agreement, a private placement and a tender offer to address the numerous constraints of PRC securities regulations.
ARCELOR MITTAL ACQUISITION IN CHINA ORIENTAL GROUP COMPANY Firms: Baker & McKenzie, King & Wood, Herbert Smith, Freshfields Banks: UBS Securities Why: This was a complex transaction involving various strategic, legal and regulatory issues. Part of the challenging aspect of the deal was the acquisition of a 28% stake in China Oriental coupled with the arrangements under the shareholders agreement between ArcelorMittal, Mr. Han, Wellbeing Holdings Limited and Chingford Holdings Limited. These are important steps in enabling ArcleorMittal to strengthen its position in the fastestgrowing steel market in the world – China.