Lockup agreement breach. This is old news though I don't know if it's been discussed yet:
- Netconductor.com, long since $0.92
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Record: 4
Title: Controversy surrounds new share sale from CyberWorks.
Subject(s): STOCKS; PACIFIC Century CyberWorks (Company)
Source: Euroweek, 10/15/99, Issue 624, p16, 1/4p
Abstract: Deals with the controversy surrounding the sale of stocks
from Pacific Century CyberWorks company. Information on the
stocks of the company; Details on the sale agreement.
AN: 2396639
ISSN: 0952-7036
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Database: Business Source Elite
Section: ASIAN CAPITAL MARKETS
CONTROVERSY SURROUNDS NEW SHARE SALE FROM CYBERWORKS
THE HONG Kong share placement for Pacific Century CyberWorks, the largest
so far this year, was engulfed in controversy this week after what appeared
to be an unprecedented breach of a lock-up agreement.
The 635m share issue (plus 92.25m share greenshoe of which 33.863m has been
exercised) has so far raised a total of HK$4.08bn ($524.42m). The deal
follows a sale -- forced by Hong Kong Stock Exchange -- to raise the
company's freefloat to a minimum 25% just a month ago.
In the deal some 360m shares were placed and the sale raised $295m. BNP
Prime Peregrine, Credit Suisse First Boston and HSBC were bookrunners on
the deal, with Jardine Fleming a joint lead manager.
As underwriters to the issue, all were signatories to a 180-day lockup
agreement.
This week's deal took place on Tuesday, with BNP Prime Peregrine as
bookrunner. HSBC and Jardine Fleming also participated, but Credit Suisse
First Boston did not. Some market observers suggested that the necessary
waiver was not sought by BNP from the signatories until after the deal had
been launched.
Bankers who participated in the deal denied this and insisted prior
approval had been given.
Whatever the chronology of the issue, some bankers considered the deal an
affront to investors who had bought new shares just a month ago. "Investors
are understandably aggrieved by this opportunistic move," said one banker.
The shares were sold at HK$6.10 -- a discount of 8.27% to the October 12
close. The offering was a Hong Kong-style top up placement and the proceeds
were used for the part acquisition of SoftNet -- a Nasdaq-listed US
internet content provider -- for $128.75m. The remainder of the proceeds
will go to CyberWorks' venture capital operation and for other strategic
acquisitions.
The stock closed down 2.2% following the placement and yesterday stood at
HK6.10. Senior officials at BNP did not return calls.
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Source: Euroweek, 10/15/99, Issue 624, p16, 1/4p.
Item Number: 2396639
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