China: bucket of whitewash

Simmons & Simmons advises Chinatex

Chinese state-owned outfit Chinatex Corporation was advised by London-based global firm Simmons & Simmons on the subscription of 34 per cent shares in Fountain Set for HK$511m (£42m) – making the corporation the single largest shareholder – as well as an application to the Securities and Futures Commission for a ‘whitewash waiver’.
A whitewash waiver is a system used in Hong Kong that allows the foregoing of the rights of independent shareholders when receiving a mandatory takeover offer from an investor for the ordinary shares of the company not already owned or controlled by those shareholders.
The tactic was often invoked some years ago, but, according to expert commentator, it had fallen into disuse until recently regaining popularity.
Chinatex is China’s biggest cotton trader, while Fountain Set is a major player in the textile and garment industry and is listed on the Hong Kong Stock Exchange.
The Simmons & Simmons team was led by corporate partners Davis Wang and Tom Deegan.
 

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