Sinopec drops $2bn bid for China Gas

Asia’s largest refiner Sinopec (SNP.NYSE, 600028.SH, 0386.HKG) and ENN Energy Holdings (2688.HKG) abandoned their US$2.2 billion plan to acquire piped-gas distributor China Gas (0384.HKG), citing failure to obtain government approval, Reuters reported. The announcement came after a long and complicated takeover battle with major China Gas shareholders, among them state-owned Beijing Enterprises Group with 51%. Instead, Sinopec and China Gas plan to set up a joint venture to distribute liquefied petroleum gas (LGP) produced by Sinopec as well as develop city gas projects, which industry watchers view as a move to save face. China Gas’ share price rose to HK$4.30 on Friday, trading at a premium to the Sinopec/ENN conditional cash offer of HK$3.50 made in December 2011. Sinopec now holds 5% stake in China Gas.