BofA Securities: ENN ENERGY (02688) privatization plan falls through, future privatization plan will have to wait for 12 months.

Bank of America Securities released a research report stating that the privatization plan of ENN ENERGY (02688) has failed. XinAo Gas Holdings (600803.SH) believes that extending the deadline of the plan will bring more uncertainty and limit its operation under the takeover rules. Considering the macro environment and changes in business plans, XinAo Gas Holdings has decided to terminate the privatization transaction. The bank stated that terminating the privatization transaction will affect ENN ENERGY's corporate governance image, implying that the parent company may sacrifice the interests of minority shareholders for its own benefit. The termination of the transaction also reflects that the trend of declining structural costs of natural gas after the Middle East conflict may be delayed, and natural gas distributors are facing more challenges. However, XinAo Gas Holdings announced that it will increase its stake in ENN ENERGY. The bank understands that its increase in stake in the next 12 months will not exceed 2%, otherwise triggering a full acquisition, and the future privatization plan will also need to wait for a 12-month cooling-off period.