Bottom line: Shanda’s purchase of 12 percent of LendingClub reflects its new investment focus on global financial services, while Tencent’s pursuit of a major Finnish game maker is consistent with its previous M&A strategy.
Tencent eyes Finland’s Supercell
Major outbound M&A deals involving 2 of China’s largest private firms are in the headlines today, with new moves by private equity investor Shanda and Internet giant Tencent (HKEx: 700) reflecting their latest buying priorities. The first deal has Shanda buying a large stake in LendingClub (NYSE: LC), the peer-to-peer (P2P) US lending pioneer whose shares have tumbled recently due to a scandal involving some of its loans. The other headline has Tencent looking to take control of Finnish game maker Supercell, in a deal that would be its biggest acquisition of all time valued at several billion dollars. Read Full Post…
Bottom line: Xiaomi’s rapid slide in China is unlikely to ease soon and it’s likely to fall out of the top 5 brands before year end, while Huawei’s lawsuit against Samsung reflects a new confidence with its recent rapid rise.
Xiaomi rapidly losing steam in China
New headlines are shining a spotlight on 2 of China’s best-known domestic smartphone brands, even though the fast-rising Huawei and rapidly sinking Xiaomi are moving in opposite directions. New data shows just how badly Xiaomi has slipped over the last year at home, where the former market leader is now in danger of dropping out of the top 5 following a huge decline in first quarter sales. Meantime, the same data show a continued surge for Huawei, which is showing its growing confidence by a filing a new patent lawsuit against global smartphone leader Samsung (Seoul: 005930). Read Full Post…
Bottom line: A recent spree of European soccer purchases by Chinese buyers could auger a similar bid for an NBA team in the next 1-3 years, with Alibaba and Wanda as 2 of the most likely buyers.
Alibaba in talks for FIFA sponsorship
A recent stream of global sports investments from China has bounced back into the headlines, with word that e-commerce juggernaut Alibaba (NYSE: BABA) is near a major sponsorship deal with soccer giant FIFA, even as a Chinese businessman has just signed a separate deal to buy British club Aston Villa. The 2 latest deals spotlight China’s sudden fascination with global sports, as millions of Chinese embrace these globally famous names over local leagues that are far less professional and tainted by corruption scandals.
Nearly all of the deals to date have been focused in Europe and on soccer, which is hugely popular in China. But basketball is equally popular in the world’s most populous country, which raises the intriguing question of when we might see a Chinese buyer bid for an NBA team, in what would be a first-of-its kind deal sure to make global headlines. Read Full Post…
The following press releases and news reports about China companies were carried on May 25. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) in Talks to Buy Supercell Stake From SoftBank, WSJ Says (English article)
Huawei Sues Samsung (Seoul: 005930), Demands Royalties on Phone and Tablet Tech (English article)
Chinese Billionaire Chen’s Shanda Buys 11.7 Pct of LendingClub (NYSE: LC) (English article)
Tesla (Nasdaq: TSLA) May Push Back Plan for China Manufacturing (Chinese article)
Baidu-Affiliated (Nasdaq: BIDU) iQiyi Plans Backdoor A-Share Listing Next Year (Chinese article)
Bottom line: Rumors that LeEco is in talks to take over Coolpad are probably true, with a deal likely in the next few months that would see the former buy a controlling stake or even purchase the latter outright.
Coolpad to be acquired by LeEco?
I don’t usually write about rumors, but I just couldn’t resist opining on new market talk saying that struggling smartphone maker Coolpad (HKEx: 2369) may become the first major player to get swallowed up in a looming industry shakeup. In this case Coolpad is denying the rumors, which say it will be acquired by online video superstar LeEco (Shenzhen: 300104), which is already a major stakeholder and now pays Coolpad to manufacture its recently launched line of smartphones. Read Full Post…
Bottom line: A backdoor listing plan by SF Express in Shenzhen, a New York IPO plan by China Music Corp and 3 new China OTC listings by ZTE units reflect creative approaches to new listings by Chinese firms due to bottlenecks for traditional IPOs.
SF Express eyes backdoor listing
A trio of IPO stories in the headlines are quite revealing, as none are happening through traditional channels on China’s 3 main stock exchanges in Shanghai and Shenzhen. Instead, the largest of the 3 plans has parcel delivery giant SF Express eyeing a backdoor listing using a shell company from the minerals business. Meantime, music streaming company China Music Corp has popped up across the Pacific in New York, where it is reportedly planning an IPO that could be the largest of its kind this year. Read Full Post…
Bottom line: Beijing regulators should take a more hands-off approach to outbound M&A by major institutional buyers like Anbang, and let them take more direct responsibility for their investment decisions.
Anbang targeting InnVest?
A new showdown could be brewing between Beijing and China’s newly minted field of outbound investors, as reports emerged last week that insurer Anbang was planning a major new Canadian acquisition less than 2 months after China’s insurance regulator reportedly vetoed a previous similar plan. The latest deal would see Anbang buy InnVest Real Estate Investment Trust (Toronto: INN-UN), one of Canada’s largest hotel owners, following its failed bid in March to buy US hotel giant Starwood (NYSE: HOT), operator of the Westin and Sheraton brands. Read Full Post…
The following press releases and news reports about China companies were carried on May 24. To view a full article or story, click on the link next to the headline.
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SF Express Eyes Backdoor Listing Using Dingtai Rare Earth (Shenzhen: 002352) (Chinese article)
Tencent-Backed China Music Corp Launches Process for NY IPO (Chinese article)
Coolpad (HKEx: 2369) Denies Report of Plan to be Acquired by LeEco (Shenzhen: 300104) (Chinese article)
Wal-Mart (NYSE: WMT) China Sales Rise 5.1 Pct Y/Y in Q1 (English article)
Bottom line: CIC’s withdrawal from the bidding for a stake in Yum’s China unit represents a minor setback, but Yum’s long history in the market makes finding major local investor less important.
CIC ends bid for Yum China stake
KFC parent Yum Brands (NYSE: YUM) has lost a major potential ally as it prepares to spin off its China business, with word that China’s sovereign wealth fund has dropped out of the bidding for 20 percent of the unit. Reuters is reporting that China Investment Corp (CIC) abandoned its bid for a number of reasons, including Yum’s refusal to sell a controlling stake to the new investor group. Yum has previously said it wants to sell just 20 percent of the China unit, which includes 7,200 stores. It also plans to sell more of the unit’s shares through an IPO later this year in Hong Kong or New York. Read Full Post…
Bottom line: New revelations about Baidu’s fees for endorsing certain companies and including them in special zones on its website are the result of a business dispute and are unlikely to attract major attention from China’s Internet regulators.
Sofang protests Baidu fees
Just as Baidu (Nasdaq: BIDU) starts to recover from a major scandal involving misleading online search results, the Internet giant is coming under attack for similar tactics from a major online real estate services firm called Sofang.com. In this case Sofang’s move looks somewhat opportunistic, taking advantage of the earlier recent scandal to draw attention to another one of Baidu’s less-than-transparent practices involving fees for special treatment on its various websites. Read Full Post…
A couple of culinary headlines this week are spotlighting the important role that food plays in defining a city’s character, not only in terms of local tastes but also its openness to out-of-town flavors. Shanghai’s culinary evolution over the last 2 decades has been nothing short of spectacular in that regard, as the city transformed from a regional backwater dominated by local fare like xiaolongbao to one where top-notch flavors from throughout China and abroad are widely available. Read Full Post…
