Asia private equity firms have called for Hong Kong’s Takeovers Code to be brought in line with international standards.
Unitas Capital’s former partner Kei Chua told delegates at yesterday’s IFLR Asia M&A Forum that the Code’s onerous requirements were dissuading private equity firms from pursuing takeovers of Hong Kong targets.
“On the face of it, there are many reasons Hong Kong ListCos are attractive to private equity investment, such as scale of operations and cash flow, as well as real management teams of commercially-minded people,” he said.
“But when you dig deeper and look at how a PE firm would approach the takeover there are some pretty significant structural and practical issues,” Chua added.Extensive restrictions on communication permitted with the management and shareholders of a prospective target plus onerous announcement requirements have significantly impaired PE houses’ ability to complete...