prhb, from your article it would seem that CGNPC would have to...

prhb, from your article it would seem that CGNPC would have to prove that their dominant purpose in acquiring KAH is not to obtain control of the downstream company, ie EXT, or that by buying KAH, they are not obtaining effective control of EXT.

I can't see any way they can satisfy these conditions and thus get out of a downstream offer.

Interestingly, if they are compelled to make a downstream offer for EXT, then it has to be either:

"•the fair value ascribed to the downstream shares by an independent expert, or
•the ‘effective’ price of the downstream shares (that is, where the price effectively being offered to the upstream shareholders for the shares in the downstream company can be clearly determined from the upstream acquisition price)".

Here is where it gets interesting, who decides whether it has to be fair value ascribed by an independent expert, or the "see through" price from the KAH acquisition??? If it were an independent expert then conceivably, we could end up in the situation where holders of KAH shares end up with far less than holders of EXT shares.

Interesting times.

Cheers

KC