Bottom line: Beijing should make investigators be more transparent when making publicly visible moves like detaining company executives, or risk financial turmoil when markets are left to try and guess what’s happening.
Transparency needed when big execs are detained
Beijing’s anti-corruption campaign took an unexpected turn into the private sector last week with the sudden disappearance of Guo Guangchang, one of China’s richest men and chairman of one of its most successful private conglomerates, Fosun Group. Word of Guo’s disappearance sparked widespread speculation and also some panic among investors in his dozen listed companies, forcing the group to scramble for answers to avoid financial chaos.
The case highlights the need for greater transparency by anti-graft investigators as they dig deeper into China’s corporate realm to root out corruption that has become all too common in the nation’s business culture. Read Full Post…
Bottom line: The detention of Fosun Chairman Guo Guangchang could signal a move into the private sector for Beijing’s anti-corruption drive, a move that would put top executives in traditional sectors like finance and real estate most at risk.
Questions hover over disappearance of Guo Guangchang
Beijing’s 2-year-old anti-corruption drive has taken an unexpected twist into the private sector, with word that one of the country’s richest men and head of the high-profile Fosun Group was taken away by police. There’s very little detail on reasons behind the disappearance of Guo Guangchang, sometimes called the Warren Buffett of China for his investing acumen. But speculation centers on his potential involvement in corruption investigations involving a major figure in his home base of Shanghai.
Up until now, nearly all of the dozens of company executives being investigated for corruption have come from the state-run sector, where officials are much more likely to use their position for personal gain. But corrupt practices like lavish gift giving and bribery are a fundamental part of doing business in China, and there’s little doubt that such practices also occur in the country’s vibrant private sector. Read Full Post…
Bottom line: Citic Capital and Fosun are expanding their tastes beyond the traditional Chinese preference for distressed assets, reflecting growing sophistication and diverging strategies of China’s emerging private equity buyers.
Citic Capital in group buying OmniVision
Chinese private equity is in a few major headlines this week, picking up assets in the technology, insurance and retail sectors in the US and Japan. The wide range of deals and geographies reflects the diverging strategies of some of China’s emerging private equity giants, which are rapidly developing their own individual personalities on the global stage. Citic Capital is behind 2 of the latest deals, picking up a retail asset in Japan and a US company that specializes in imaging technology. Meantime, Fosun International (HKEx: 656) has made a major new purchase in the US, offering to buy the remaining stake in an insurer that it first invested in last year. Read Full Post…
Bottom line: Fosun’s purchase of Club Med looks like a good bet despite the deal’s big premium, and could be followed by a major Chinese expansion and new IPO in Hong Kong in the next 5 years.
Fosun wins Club Med bidding war
Normally I’m not a big fan of bidding wars since they tend to overinflate asset prices, but I’ll admit I was quite encouraged to read that Chinese private equity giant Fosun International (HKEx: 656) finally appears to have won a buyout battle for French resort operator Club Med (Paris: CU). My optimism is based on a number of factors, both financial and also on the strong future growth that Club Med could enjoy if and when the longest buyout in history for a Paris-traded company finally closes. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 3-5. To view a full article or story, click on the link next to the headline.
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Fosun (HKEx: 656) Wins Contest For Club Med As Andrea Bonomi To Drop Bid (English article)
Haier-Evergrande, JD.com-Midea In New Alliances For 2015 (Chinese article)
Perfect World (Nasdaq: PWRD) Receves “Going Private” Proposal at $20 Per ADS (PRNewswire)
Renren (NYSE: RENN) Announces Resignation Of CFO, Board Changes (PRNewswire)
Xiaomi Doubles Revenue to $12 Billion as Phone Sales Triple (English article)
Bottom line: Fosun is prepared to up its latest bid for Club Med by another 20-30 percent, while Anbang needs to be careful in its investments to avoid ending up with a portfolio of overvalued, underperforming assets.
Fosun ups Club Med bid
Two of China’s most active institutional investors are in the headlines today, led by a new sweetened bid from private equity giant Fosun International (HKEx: 656) as it competes with an Italian group to buy French vacation resort operator Club Med (Paris: CU). Meantime, another recently acquisitive investor Anbang Insurance is back in the headlines, with word that it’s boosted its stake in Minsheng Bank (HKEx: 1988 Shanghai: 600016), China’s oldest and largest privately owned lender. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 20-22. To view a full article or story, click on the link next to the headline.
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China’s Fosun (HKEx: 656) Raises Offer For Club Med (Paris: CU) (English article)
Waldorf Buyer Anbang Invests In Property, Banking Stakes (English article)
China Mobile (HKEx: 941) Targets 250 Mln 4G Users By End Of 2015 (Chinese article)
BYD (HKEx: 1211) Stock Rebounds, Confirms Buffett Hasn’t Sold Down Stake (Chinese article)
Ctrip (Nasdaq: CTRP) Launches Open Platform For Travel Agents (Chinese article)
Bottom line: Fosun should drop out of the bidding war for Club Med to avoid overpaying for the resort operator, despite big potential from a possible Asia expansion.
Fosun in bidding war for Club Med
Chinese investors aren’t the only companies with big money to spend on global M&A for undervalued western assets. That’s the lesson that high-flying private equity firm Fosun International (HKEx: 656) is quickly learning, as it gets sucked into a bidding war for French holiday resort operator Club Med (Paris: CU). This particular bidding war is one of the first I’ve seen for a major western asset involving Chinese bidders, and could presage more competition from local western investors who want to take advantage of the many assets now now being sold at bargain prices. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 6-8. To view a full article or story, click on the link next to the headline.
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LeTV (Shenzhen: 300104) Resumes Trading After Clarifying Up 3 Issues (Chinese article)
Anta’s (HKEx: 2020) Fall Shows Fragile Support For China Companies (English article)
Club Med (Paris: CU) Contest Takes New Turn With $1.1 Bln Bonomi Bid (English article)
Game Developer Feiyu Technology Raises HK$570 Mln Yuan in HK IPO (Chinese article)
Fluor (NYSE: FLR) Signs MOU With China National Nuclear Corp (Businesswire)
The following press releases and media reports about Chinese companies were carried on December 2. To view a full article or story, click on the link next to the headline.
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Fosun (HKEx: 656) Raises Club Med (Paris: CU) Bid Hours Before Deadline (English article)
Jack Ma, Pony Ma May Join In Ping An’s (HKEx: 2318) $4.75 Bln Fund Raising (Chinese article)
The following press releases and media reports about Chinese companies were carried on September 13-15. To view a full article or story, click on the link next to the headline.
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China’s Fosun (HKEx: 656) Fights Back With Counterbid For Club Med (Paris: CU) (English article)
Sinopec (HKEx: 386) Sells $17.5 Bln Retail Unit Stake to Investors (English article)
S&P Dow JonesIndices Says Alibaba Could Be Added To Global Benchmarks (English article)
Total Active Users On Weibo (Nasdaq: WB) App Down by 10.95 Pct in August 2014 (English article)
Suning (Shenzhen: 002024) Makes Low-Key Entry To Cross-Border E-Commerce (Chinese article)
