Why Hong Kong-listed companies should look to the Cayman Islands

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clpstaff &clp articles

While takeover offers and schemes of arrangements remain useful structures for privatisations of HKSE listed companies, it may be time to consider the statutory merger process

For any potential bidder considering the acquisition of a listed company, issues such as ease of transaction execution, the ability to respond to a competing offer, timetable and cost will be of great importance. The chosen form of legal process to implement these deals can have a considerable impact on their successful, cost-effective and timely completion.

The Hong Kong public market is characterised by a significant number of companies listed on the Hong Kong Stock Exchange (HKSE) that, often for reasons of historical family ownership, have one or a small number of controlling shareholders. It is not unusual for these shareholders to seek (or agree to support a third party's attempt to acquire) 100% control of the business and delist the company. These transactions are commonly referred to in Hong Kong as privatisations.

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