OREANDA-NEWS. January 18, 2012. Gas company SK E&S, an affiliate of South Korean conglomerate SK Group, plans to buy an additional stake of around 5% in China Gas Holdings Ltd. for KRW120 billion (USD 104 million) to expand its gas business in China, an official at the Korean firm said.

The company, which currently has a 5.9% stake in the Chinese firm according to the official, is increasing its stake at a time when China Gas is the subject of a hostile takeover bid from China Petroleum & Chemical Corp. /quotes/zigman/269314/quotes/nls/snp SNP -0.52% and piped-gas distributor ENN Energy Holdings Ltd. . But the official, who declined to be named, said the plan is unrelated to any merger activity and SK E&S currently has no intention to acquire the Chinese company.

China Gas shares appear undervalued and the Korean firm will buy the shares over a period of time through the stock market when prices are appropriate, said the official. SK E&S has been increasing its shareholding in China Gas since 2006.

An official from another gas company in the group, SK Gas, said the company doesn't have any immediate plan to increase its stake in the Chinese company. It has a 4.49% stake in China Gas.

China Petroleum & Chemical, known as Sinopec, and ENN Energy said in December they planned to spend up to HKD16.7 billion (USD 2.15 billion) to acquire all the outstanding shares in China Gas, which has an extensive gas distribution business in China. China Gas said last month the bid was "wholly unsolicited, opportunistic" and didn't reflect its fundamental value.

Another company bought into China Gas following news of the takeover bid. On Dec. 28, Fortune Oil PLC (FTO.LN), which focuses on oil, natural gas and resources supply and investments primarily in China, said it acquired a 2.15% stake in China Gas for GBP24.2 million.