Float glass manufacturer Xinyi Glass Holdings, the parent of PV glass business Xinyi Solar, has made a HKD1.65 billion (USD212 million) takeover offer for China Glass Holdings Ltd. The offer includes buying out China Glass’s all issued 1.81 billion shares. Xinyi has offered HKD0.90 (USD0.12) per share in China Glass, for HKD1.63 billion; plus HKD54,500 (USD7,000) for every unredeemed convertible bond, for an extra HKD13.6 million, and HKD3,000 (USD387) for every unactioned share option at a rate of HKD0.0001 (USD0.00001) per share.
The share offer represents a 17.4 per cent discount on Wednesday’s closing price of HKD1.09 per share and a 28.6 per cent discount on the unaudited net asset value revealed by China Glass at the end of June 2020. The share offer could rise to HKD1.67 billion if all eligible convertible bonds and share options are auctioned.
China Glass will remain listed and traded on the Stock Exchange.
Xinyi Glass expects that the acquisition will enhance the economies of scale by raising production efficiency and saving costs of purchases, production, and fixed costs.
REGlobal’s Views: Prices for solar glass have risen by over 71 per cent since July, and manufacturers are struggling to produce it fast enough to keep more than a week’s worth of sales in inventory, according to industry reports. In this scenario, the move to acquire China Glass would enable Xinyi to quickly expand capacity and meet its consumers’ demand.