China Gas: on the defensive Whinger or investor rights campaigner? Views of China Gas depend on whether you are ENN Energy and Sinopec, its hostile suitors, or those it claims are affected by an "unreasonable" deal timetable (three months, no absolute offer, and counting). China's first hostile bid by a state-owned enterprise for a domestic company has quickly adopted international dealmakers" familiar PR gambits. But its Chinese element adds a new, untested dimension. Sinopec and ENN Energy launched a HK$3.50-a-share offer for 50.1 per cent of China Gas in mid-December, valuing the target at over $2bn. The offer is conditional on a nod from the ministry of commerce. This has restrained the hostile suitors from a determined wooing. It is China Gas, however, that claims to be the most upset: it has described the wait - common to all China takeovers - as "unreasonable" for its upset workers and for shareholders. It has used the time to prepare its defence: some of its closest friends, including London's Fortune Oil, have been busy boosting their stakes (Fortune now owns 14 per cent). This has helped push China Gas's shares to almost HK$3.80. ENN and Sinopec maintain their offer is "fair value" (bidspeak for "hmmm"). The deal has logic. Sinopec has interests in liquefied natural gas but lacks China Gas's urban distribution network. ENN is big and growing in this field. But there are costs: while Sinopec can cover its stake out of free cash flow, ENN risks losing its investment grade rating. In December, the offer represented a 25 per cent premium and caught China Gas at a moment of weakness: founder Liu Minghui was jailed in 2010 and investigated for embezzlement. He has since been released. The suitors cannot raise their offer, if they wanted to, until Beijing decides. This could take months. Plenty of time for them to fight back in other ways, however - if, of course, they want to.