Yichang HEC (1558 HK): Absorption Via Speculative Scrip. Avoid
A "Privatisation via a Merger by Absorption" is nothing new in Hong Kong. But the Offer consideration for Yichang HEC (1558 HK)'s minorities is in unlisted scrip - that's new.
The Offeror holds 51.41% in Yichang HEC. Founder Guo Meilan and her son Zhang Yushuai control 62.12% of the Offeror. Yichang HEC shareholders are being offered 0.263614 "Offeror H shares".
These consideration shares are unlisted. An independent valuer backs out an implied scrip value of HK$18.12-HK$20.60/share. This is a super complicated, overwrought deal. With numerous unknowns. I'd vote this down.
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