HONG KONG (March 15): Yingde Gases would welcome any competing bids for the Hong-Kong listed firm that will enable its shareholders to get a higher price for their holdings, the management of China's largest industrial gases company told Reuters on Wednesday.

Yingde, the subject of a rare public Chinese boardroom battle, witnessed the latest twist to the months-long saga when Hong Kong-based private equity firm PAG this month agreed to buy the 42.1% stake of Yingde's three co-founders for US$616 million.

The terms of the agreement allow the stake sale to PAG to be suspended if the founders receive a competing offer at least 5% higher than PAG's, or equivalent to HK$6.3 (US$0.8109) per share.

The deal of the co-founders with PAG was seen by some analysts as a setback for US industrial gas maker Air Products, which made a takeover approach late last year to Yingde for as much as US$1.5 billion in cash, but has not put in a firm bid.

On Wednesday, Trevor Strutt, the recently-reinstated chief operating officer of Yingde, said that neither he nor chairman and CEO Sun Zhongguo had yet surrendered their shares — amounting to 29% of the company — and continued to be hopeful of achieving a higher price for shareholders. PAG's offer to Yingde's shareholders closes on April 10.

"No one is in a leading position. There is still the ability for anybody to make an offer providing it's 5% above the current asking price. So it’s still open for anybody," Strutt told Reuters in a telephone interview.

Strutt and Sun were reinstated to their executive posts after a majority of shareholders voted last week to keep them on the board and oust five other board members. Both men had previously been relieved from their executive posts at a November board meeting that named fellow co-founder, Zhao Xiangti, chairman of Yingde.

Last week's vote ended a dramatic four-month battle for control of the US$1.6 billion Hong Kong company and saw Zhao Xiangti being forced to step down.

In their first interview since being reinstated, Strutt and Sun defended the deal with PAG, the terms of which had been criticised by some shareholders.

Sun said the PAG offer made "a whole lot of commercial sense" by setting a floor price of HK$6 per share, compared with a HK$3.2 share placement to Chinese sewage treatment firm OriginWater previously proposed by the board in November.

The executives said they welcome anyone, including Air Products, with a higher offer.

"I think both Air Products and PAG will solve the (company's) financial problems," said Sun.

Yingde's shares closed at HK$6.54 on Wednesday, indicating that investors expect a bid higher than the HK$6 per share offered by PAG to emerge.

Yingde's main products include oxygen, nitrogen, argon and some specialty gases which it sells primarily to companies in the steel, iron ore, chemicals and electronics industries.

Sun said they are looking to bring in one more new board member with expertise in the gas sector to help make the sale process as smooth as possible.

(US$1 = 7.7687 Hong Kong dollars)