ENN mulls abandoning $12 billion buyout of ENN ENERGY unit

ENN Natural Gas is considering abandoning its $12 billion buyout of ENN ENERGY, people familiar with the matter said, potentially letting the June 12 precondition deadline lapse and upending one of China's largest energy-sector privatization deals.

"The probability of an extension is low given the complexity of the preconditions and the current market environment," said a person familiar with the discussions, who asked not to be identified because the deliberations are private.

ENN Natural Gas, which holds about 34 percent of ENN ENERGY through Xinneng (Hong Kong) Energy Investment, had previously pushed the deadline from March 13 to June 12. The Shanghai-listed company proposed a cash-and-stock offer in March 2025 valuing the Hong Kong-listed unit at approximately HKD 90.5 billion, saying at the time it would not raise the bid and planned to delist the entity. ENN also applied for a Hong Kong listing concurrently.

Abandoning the deal would remove the privatization premium embedded in ENN ENERGY's shares, which traded at HKD 48.90 on Friday, well below the implied offer value. HSBC Research maintained a buy rating with a HKD 66 target price, while JPMorgan kept an overweight rating with a HKD 68 target, suggesting analysts see value even without the buyout. For ENN Natural Gas, walking away would preserve cash and stock resources at a time when China's LNG importers face margin pressure from volatile global gas prices. The company has not publicly commented on whether it will extend the deadline beyond June 12.

This article is for informational purposes only and does not constitute investment advice.