Chinese holders ENN, Hony appoint adviser to help navigate...

Chinese holders ENN, Hony appoint adviser to help navigate Santos play
CHRISTINE LACY APRIL 12, 2018

https://www.theaustralian.com.au/bu...y/news-story/dc1e359541a482adb24e40fa5cff1007

Linda Cook’s Harbour Energy has positioned itself as supremely confident in its break fee-free $13.5 billion bid for Santos. But will its major Chinese shareholders cause some strategic disruption for the Middle Kingdom?
Two Chinese outfits, ENN and Hony Capital, together control about 15 per cent of the Keith Spence-chaired Santos, or about $2bn at Harbour’s circa $6.50-a-share offer.
They will play a critical role in any successful bid by the EIG-controlled Harbour for the Aussie oil and gas major.
The Chinese haven’t been sitting on their hands since Cook’s April invasion.
Margin Call understands ENN and Hony, which effectively act in concert, have just appointed UBS — led by Mitch Turner, the investment bank’s Sydney-based grand pooh-bah on energy advisory matters — to assist their navigation of Harbour’s bold play for Aussie battler Santos.

Remember, the strategic Chinese block’s acceptance is an essential precursor to approval of the deal by former chief spook David Irvine’s Foreign Investment Review Board and “The Decider”, Treasurer Scott Morrison.
ENN has also engaged the services of FTI’s Samantha Magnusson (a one-time campaign manager to Prime Minister Malcolm Turnbull) to assist its communications in the local market on the bid, which on current arrangements would see the Chinese stake climb above the 15 per cent ownership threshold.
Also on board for ENN-Hony-Xi Jinping Middle Kingdom consortium is ex-Santos, Oz Minerals and PMO adviser Damon Hunt, now also with FTI.
The strategic Chinese pair, an essential piece of the American’s jigsaw, are in high stakes discussions with Harbour.
Chinese gas distributor ENN is one of the biggest companies in President Xi’s Middle Kingdom, while Chinese private equity group Hony has more than $US10bn in funds under management and has in recent times been a co-investor with the likes of fellow private
equity giant TPG.
These shareholders, like Harbour’s Washington DC-based, Cayman Islands-loving parent EIG, have deep pockets and rich friends. Harbour and its advisers JP Morgan might want to watch over their shoulder.
“Where the Santos board receives and recommends a third-party offer, nothing in this document prevents ENN or Hony from making a counteroffer for Santos shares under its own scheme of arrangement or an off-market takeover bid proposal,” Santos’ mid-last year agreement with ENN/Hony signed by then Santos chair Peter Coates reads.
That’s at the same time as Harbour is seeking to get the Chinese investors — who hold their stake in Santos for their own strategic purpose — to come on board in critical support of their American deal.
Wonder if the Chinese are talking to any other interested parties?