Yangzijiang / Baker Tech

Yangzijiang / Baker Tech (breaking news): update on proposed PPLH acquisition.
Acquisition price has been revised downwards to US$116.3m, vs original offer of US$155m. The long stop date for the transaction has also been removed.
YZJ has novated (ie transferred) its letter of offer for PPLH to QD Asia, so QD Asia is now the transacting entity, and all legal costs arising from the dispute with SML will be ultimately borne by QD Asia

Rest of deal remains largely similar. Main condition for sale is that SML must not have been determined by courts to have validly exercised its right of pre-emption over the 15% stake in PPLH.
If sale is successful, YZJ may acquire 45% of QD Asia’s stake in PPLH for US$52.3m, with call option for an additional 5.1% of PPLH shares for US$6m.
QD Asia is a Qatar sovereign wealth fund, which has also recently undertaken to subscribe for a placement of 84m YZJ shares...

News somewhat positive for YZJ, as it does not have to deal directly with the legal issues arising from the SML dispute. Moreover, YZJ’s original intention to acquire PPLH is still intact, given its agreement to acquire PPLH shares from QD Asia. And it can now do so at a lower price…

Although sale price is lower, #Baker Tech still stands to reap $151m profit if sale goes through.

Post disposal, Baker Tech NTA/sh would rise to $0.37, vs $0.14 currently. While EPS would rise to $0.29, vs $0.06, based on FY09 numbers...