Buyer Community> Trade Intelligence> Energy> UPDATE 1-China Gas plans to buy Zhongyu Gas -sources
Source: Reuters

UPDATE 1-China Gas plans to buy Zhongyu Gas -sources

Published: 17 Jan 2010 19:49:57 PST

* China Gas plans to buyout Zhongyu Gas -sources

* Trading in China Gas, Zhongyu halted pending statements

HONG KONG, Jan 18 - Chinese natural gas distributor China Gas Holdings <0384.HK> plans to make a general offer for mainland integrated gas operator Zhongyu Gas <8070.HK>, sources close to the deal said on Monday.

No other details were immediately available.

Officials from both companies declined to comment.

China Gas, which constructs and operates city gas pipeline infrastructure, said in a statement earlier on Monday that trading in its shares was suspended pending a statement regarding a possible offer by the company for shares of an unidentified publicly listed company in Hong Kong.

Zhongyu Gas, which is involved in gas resources development, pipeline network construction and piped gas distribution, said trading in its shares was halted on Monday pending an announcement in relation to the Hong Kong Code on Takeovers and Mergers.

Shares of China Gas had risen 13.9 percent so far in January to close at HK$4.83 on Friday, while stocks of Zhongyu Gas surged 15.6 percent to HK$0.89.

China Gas has a market capitalisation of HK$16.22 billion ($2.09 billion), while Zhongyu was at HK$1.73 billion.

Analysts have held an optimistic view on the natural gas distribution sector in China in anticipation of steady supply and an increasing demand for cleaner natural gas energy as many mainland cities undergo urbanisation. (US$1=HK$7.76)

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