* Co-founders Sun, Strutt to stay on Yingde board, Zhao
* Shareholders force big board revamp of Yingde
* Four vacant positions to be filled on Yingde board
* Industrial gases company in midst of takeover battle
(Adds official tally of shareholder meetings, details)
HONG KONG, March 9 (Reuters) - A majority of Yingde Gases
Group's shareholders voted to keep two of its
co-founders and main shareholders on its board and oust five
other board members, ending a four-month battle for control of
the $1.5 billion company.
Amid the power struggle, China's largest industrial gases
company is in play, with U.S. industrial gas maker Air Products
making a takeover approach, and Hong Kong-based private
equity firm PAG agreeing to buy a substantial stake.
Most shareholders at two separate extraordinary general
meetings (EGM) voted on Wednesday to keep Sun Zhongguo and
Trevor Strutt on the board of directors, while ousting another
co-founder and major shareholder, Zhao Xiangti, and four other
directors, Yingde said in a securities filing.
Shareholders also appointed former Yingde employee Zhihe Mah
to the board, but voted against a measure to reduce the board to
five people from nine.
The decision leaves four vacant board positions that could
be filled by minority shareholders, including Hong Kong-based
activist hedge fund Oasis Management Company Ltd, which said
last week it would seek a seat as the company considers
strategic alternatives, including an outright sale.
Yingde said it will try to fill the vacant posts "as soon as
possible" within a period of three months.
Sun and Strutt, previously the Chairman/CEO and COO of
Yingde, respectively, were relieved from their executive posts
at a November board meeting that named Zhao chairman of Yingde.
The two have since been in a legal fight to get reinstated.
The two were removed after "poor corporate management" and
"unsatisfactory performance" in past years, according to a
letter from the majority of Yingde's board filed ahead of the
In December, following the ouster of Sun and Strutt, asset
manager StellarS Capital (Hong Kong) Ltd and Air Products made
takeover approaches for Yingde, offering about $1.1 billion and
as much as $1.5 billion in cash, respectively.
The takeover battle took another twist last week when PAG
agreed to buy the combined 42.1 percent stake of Zhao, Sun and
Strutt for $616 million. PAG's offer came just two days after
Oasis, a minority investor in Yingde, unveiled its shareholding
in the company and plans to seek a board seat.
Yingde hired Morgan Stanley to advise on offers it received
from Air Products and StellarS Capital. Air Products offered as
much as HK$6 per share in cash for Yingde shares, while StellarS
indicative offer was for HK$4.5 per share, but neither was
PAG also offered HK$6 a share, but its agreement will be
suspended if there's a competing offer at least 5 percent higher
than PAG's, or equivalent to HK$6.3 per share. Yingde's shares
closed at HK$6.38 on Wednesday, indicating investors expect a
competing bid to emerge.
Besides Oasis, which owns a 4.5 percent stake in Yingde,
other minority investors that could benefit from the battle for
control of the company include Aberdeen Asset Management,
BlackRock Inc, Vanguard and UBS, according to Hong Kong stock
Yingde has also formed an independent board committee to
consider the offers, hire an independent financial adviser and
make a recommendation on the different proposals.
(Reporting by Elzio Barreto; Editing by Muralikumar
Anantharaman and Richard Pullin)