|WH $1.17 special situation play...$3.00 tender offer and the reason for share price can be explained if you read the 20-F. The following tidbit from their annual report could explain share performance here as institutions are likely not even able to add shares (even forced to sell) & I still see it as a nice arbitrage at $1.17 with $3.00 tender offer on the table. Sorry about the long read...it is from page 10: |
In the three years ended December 31, 2011, we did not have any direct sales to Sanctions Targets. However, we sell our products in international markets primarily through independent non-U.S. distributors who are responsible for interacting with the end customers of our products. We have limited control over these independent non-U.S. distributors, and these distributors may breach their covenant to us not to resell our products to Sanctions Targets. In addition, we do not always know the end customers to whom our distributors resell our products. We are aware of an insignificant amount of resales of our products by two non-U.S. and non-affiliated distributor customers to Sudan, a Sanctions Target, during the three years ended December 31, 2011. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Internal control over distribution of our products.” Although we have adopted a written policy to prevent future direct or indirect sales to Sanctions Targets and have begun to implement internal control mechanisms to enforce such policy when possible, we cannot assure you that our measures will be able to prevent future sales or resales of our products, directly or indirectly, to Sanctions Targets.
If our products are sold or re-sold, directly or indirectly, to Sanctions Targets, we may fail to comply with U.S. Economic Sanctions Laws and we may be subject to civil or criminal penalties and other remedial measures, which could have an adverse impact on our business, results of operations, financial conditions, liquidity and reputation. Additionally, we act as suppliers to leading Chinese oil companies, such as China National Petroleum Corporation, or CNPC, and China Petroleum & Chemical Corporation, or Sinopec. These companies currently and have in the past had business transactions and relationships with Sanctions Targets. As a result of these transactions and relationships with U.S.-designated state sponsors of terrorism, CNPC and Sinopec have received negative publicity and been the target of divestment or similar initiatives by state and municipal governments, universities and other investors. As a supplier to CNPC, Sinopec and other companies with relations to Sanctions Targets, we have no control over their business or operations. We do not believe that our products sold to these companies have been used outside of China. However, our relationships with such companies may nevertheless harm our reputation. Some of our U.S. investors may be required to sell their interests in our company under the laws of certain U.S. states or under internal investment policies or may decide for reputational reasons to sell such interests, and some U.S. institutional investors may forego the purchase of our ADSs, all of which could materially and adversely affect the value of our ADSs and your investment in us.
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