While the rest of the world busies itself with going public, Ming An Holdings has announced its privatisation by way of a Cayman court-sanctioned scheme of arrangement by its major shareholder, China Taiping Insurance Holdings Company Limited (CTIH).

Under the scheme, all of the shares in Ming An held by minority shareholders were cancelled in return for shares in CTIH. The acquisition of the shares in Ming An held by the minority shareholders was valued at approximately US$239m.

“For most privatisation deals, the consideration is in the form of cash but in the Ming An deal, the minority shareholders got shares in Ming An's major shareholder,” said Judy Lee, Appleby’s Hong Kong-based corporate partner.

"The privatisation was complicated by the need for China Tai Ping to first acquire a controlling shareholding in Ming An from its parent company, a pre-condition to the privatisation that itself required China Tai Ping’s shareholders approval.  Shareholders of Ming An essentially traded their interests in Ming An for an interest in China Taiping, thus allowing them to continue to invest in a larger and broader insurance business platform in Hong Kong and the PRC," said Stanley Chow, Latham & Watkins lead partner in the transaction

Companies usually propose to privatise when the controlling shareholders do not see a need to maintain a listed company and want to minimise listing expenses and overheads or when the shares of the company are trading at a deep discount compared to their net asset values.

“There has been an impressive market rebound since March in the Hong Kong equities market and this rebound is reducing the appetite for privatizations, so this transaction is a rare instance at this time,” said Lee.

Ming An’s shares were listed on the Hong Kong stock exchange three years ago.
The combination of Ming An and CTIH will create a leading platform with a top 10 position in the property and casualty insurance market in the PRC and a fifth-largest direct property and casualty insurance presence in Hong Kong by premium.

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