Citic Pacific makes US$385 million offer to privatise luxury car distributor Dah Chong Hong Holdings

Citic Pacific is making a HK$3 billion (US$385 million) bid to privatise luxury car and consumer goods distributor Dah Chong Hong Holdings.

The group offered HK$3.7 per share, or about 37.55 per cent over the last closing price of HK$2.69, to buy the 43.19 per cent of Dah Chong Hong it does not already own. Shares of the distributor of Audi, Bentley, Honda, and Infiniti brands surged 30.85 per cent to HK$3.52 at the close of trading on Monday.

Citic Pacific owns 56.81 per cent of the 70-year-old distributor, which began trading on the Hong Kong stock exchange in 2007. DCH has more than 100 shops and showrooms in Hong Kong, mainland China and Southeast Asia for over 20 world renown brands. It also operates the DCH Food Mark stores, selling premium meat and seafood alongside fresh fruit and daily groceries.

The privatisation will offer investors a chance to cash out at an attractive level because of thin trading volume in DCH, Citic Pacific said in a stock exchange announcement on Sunday night.

The liquidity of the DCH shares has been low over a prolonged period, which is around 0.07 per cent of the issued shares for the last 12 months up to and including the last trading date, with an average daily trading volume of around 1.40 million shares, it said.

This low trading volume could make it difficult for the scheme shareholders to execute on-market disposals within any given time frame outside the proposal, it added in the filing.