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CWT shareholders in exclusive talks for potential sale to China's HNA

The controlling shareholders of CWT have signed an exclusivity agreement to negotiate a sale of their shares to China conglomerate HNA Group, and a deal could trigger a general offer for CWT, market sources told the Business Times.

An official announcement is expected soon. The pricing and structure of the sale must still be negotiated, and it is unclear how long the exclusivity period lasts.

CWT chairman Lok Kai Meng, director Liao Chung Lik, businessman Lim Soo Seng and their families controlled about 58.9 per cent of CWT's shares as at March 16, including a 31.9 per cent stake held by investment vehicle C&P Holdings. The families have been looking to sell their stake since July 22, 2015, and have hired Credit Suisse and DBS Bank to advise them.

Singapore takeover rules require a buyer to make a general offer for the rest of the company's shares if the buyer's shareholding exceeds 30 per cent.

HNA, a group with varied businesses that include Hainan Airlines Co, is the party that has advanced the furthest in the months since the controlling shareholders' intention to sell was first announced. News that an exclusivitiy arrangement could soon be fixed was first reported on May 6.

CWT's shares last traded at S$2.12 on Friday, giving the company a market capitalisation of S$1.3 billion.