HONG KONG, March 24 (Reuters) - Air Products and Chemicals Inc said on Friday it would drop a proposed $1.5 billion bid for China’s largest producer of industrial gases, leaving the door open for a competing offer from Hong Kong-based private equity firm PAG.
The U.S. industrial gas maker said in a securities filing it would not pursue the purchase of Yingde Gases Group Co Ltd because “it is not in the best interests of Air Products’ shareholders.”
It gave no further reasons for its decision, which came less than a day after Yingde said its financial position could be “materially adversely impacted” following a management reshuffle.
Yingde’s profit warning sent its shares down 4.4 percent on Friday to close at HK$6.26.
The U.S. firm had approached Yingde in December, offering as much as $1.5 billion in cash, pending an examination of the Chinese company’s finances. PAG had matched the Air Products offer of as much as HK$6 per share of Yingde.
Yingde had been the subject of a rare public Chinese boardroom battle, with co-founders Sun Zhongguo, Trevor Strutt and Zhao Xiangti jostling for control of the board.
The company had also received a takeover approach from asset manager StellarS Capital (Hong Kong) Ltd worth $1.1 billion, while PAG agreed to buy the combined 42.1 percent stakes of Zhao, Sun and Strutt for $616 million. (Reporting by Elzio Barreto; Editing by Edmund Blair)