Bottom line: A new rival bid for Dangdang and the long closing period for Jiayuan’s privatization reflect growing shareholder resistance to low prices being offered for Chinese companies trying to de-list from New York.
Dangdang gets rival buyout bid
A couple of new headlines reflect the growing chorus of complaints about low bid prices being made for Chinese companies privatizing from New York, led by a surprise new rival offer for former e-commerce leader Dangdang (NYSE: DANG). In the other headline, online dating site Jiayuan (Nasdaq: DATE) is finally moving closer to the New York exit door, after a year-long process that saw the company’s original buyout offer meet with stiff resistance from shareholders unhappy about the price.
The volume of protest noise against some of the most recent offers has certainly been growing, as company shareholders try to get more money for their stock in the wave of buyout offers. The most recent twist saw shareholders cry foul over a management-led buyout bid for online cosmetics seller Jumei (NYSE: JMEI) last month. (previous post) A slightly different but related development saw the founder of medical clinic operator iKang (Nasdaq: KANG) cry foul after his own bid for his company got trumped by a higher offer from an independent bidder. (previous post) Read Full Post…
Bottom line: Domestic private equity is fueling a sudden resurgence in privatizations of US-listed Chinese firms, with a flurry of new deals likely to come after the signings of new buyout offers for Homeinns and Jiayuan.
Homeinns, Jiayuan move closer to US de-listings
Two companies looking to de-list their shares from New York and re-list back in China have taken major steps forward, with hotel operator Homeinns (Nasdaq: HMIN) and online dating site Jiayuan (Nasdaq: DATE) both announcing they have signed formal buyout offers to privatize. In an interesting twist to the privatization story that has seen dozens of US-listed Chinese firms announce similar plans, Homeinns and Jiayuan are both being purchased by China-listed firms as part of their buyout deals.
That means that once the buyouts are consummated, both Homeinns and Jiayuan will immediately become publicly listed in China. Such a development would mark a rapid shortening of the time these companies would need to return to Chinese stock markets from the US. In the past, the small number of similar migrations was typically taking 2 years or more to complete. Read Full Post…
Bottom line: iKang’s poison pill plan will kill a hostile offer for the company but could force a management-led group to raise its earlier bid, while CMGE’s China backdoor listing shows a quickening of the process for US-listed Chinese companies to return home.
iKang launches poison pill plan
The first bidding war for a Chinese company looking to privatize from New York has taken an interesting twist, with word that medical clinic operator iKang (Nasdaq: KANG) has launched a shareholder rights program often called a “poison pill”, aimed at preventing hostile takeovers. Usually I’m relatively neutral on this kind of defensive move, as it’s often aimed at getting shareholders better value for their money. But in this case the move seems like a somewhat abusive use of power by iKang’s founder and chief executive to protect his own earlier and significantly lower buyout offer for the company.
Meantime another headline from the recent wave of US-listed Chinese companies to privatize has gaming company China Mobile Games (CMGE) already preparing to re-list in China. If successful, CMGE’s homecoming would be remarkably quick, since it only completed its privatization from New York 3 months ago. Read Full Post…
Bottom line: iKang’s managers may have to raise their earlier buyout offer to counter a new rival bid for the company, which could embolden investors to demand similar better prices for other US-listed Chinese companies being privatized.
Bidding war erupts for iKang
An interesting new wrinkle has entered the recent privatization wave sweeping US-listed Chinese companies, with word that a group backed by some major investors is making a rival buyout offer for medical clinic operator iKang (Nasdaq: KANG). So far as I know, this is the first case of a rival bid emerging to challenge any of the nearly 3 dozen privatization offers to emerge this year, mostly from management-led groups.
That’s not to say that this latest development is completely unexpected. Many minority stakeholders have complained loudly that most of the management-led buyout offers to be announced so far grossly undervalue the companies. Those complaints have worked once or twice, most notably in the case of online dating site Jiayuan (Nasdaq: DATE), whose non-management suitor sharply raised its buyout offer after investors complained that the original bid was too low. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 1. To view a full article or story, click on the link next to the headline.
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Bank of Jinzhou (HKEx: 416) Said to Be Poised to Raise $794 Mln in IPO (English article)
Ant Financial-Backed Korean Internet Bank Wins Approval (Chinese article)
Bottom line: Guahao’s new mega-funding spotlights big growth possibilities for private medical service providers, while Hertz could continue to sell down its stake in Car Inc as China’s auto market slows.
Guahao finds riches in medical booking app
IPOs may have ground to a halt due to China’s recent market volatility, but that hasn’t stopped a steady flow of buying and selling into high-growth companies by big investors looking for the next hot trend. One such operator of a medical services app looks like the latest flavor of the day, with reports that a company called Guahao has just landed nearly $400 million in new funding. Meantime, leading rental car operator Car Inc (HKEx: 699) moved in the opposite direction, losing some momentum after early strategic investor Hertz (NYSE: HTZ) sold down more of its stake in the company.
Both of these deals are part of the natural ebb and flow of funds into and out of Chinese companies, and are often a good pointer of where the next trends might emerge. App developers have become a hot investment area, and private medical service providers are also gaining momentum under China’s overhaul of its healthcare system. Meantime, the car market is moving in the other direction due to China’s slowing economy, which is probably making big global names like Hertz less bullish on the market. Read Full Post…
Let’s take a break from the usual tech and trade war chatter today to look at the healthcare sector, focusing on the newly released maiden results from private clinic operator iKang (Nasdaq: KANG). The results look relatively solid but unspectacular, though that didn’t stop investors from dumping iKang’s shares in after-hours trade after the report came out. Even if that 17 percent sell-off holds in regular trading on Tuesday, iKang’s shares are still up about 40 percent from their IPO price back in April. Read Full Post…
A few news bits and data points are spotlighting the big potential in China’s healthcare market over the next few years for companies that can tap into an overhaul of the national medical system. While that news looks good for healthcare companies overall, the limited universe of publicly traded firms available to western investors looks a bit spottier due to individual company issues. Regulatory issues could also be a risk, as highlighted by a new price fixing ruling against US drug giant Johnson & Johnson (NYSE: JJ). Still, there could be some interesting buying opportunities for the right companies. Read Full Post…
Two weeks after this year’s first Chinese IPO in New York, there’s still a bit of life left in the market despite recent signs of slowing momentum. That’s my quick assessment after looking at the performance of the 4 companies to list so far this year, starting with education services firm Tarena (Nasdaq: TEDU), followed by clinic operator iKang (Nasdaq: KANG) and finally online real estate services firm Leju (NYSE: LEJU) and microblogging giant Weibo (Nasdaq: WB). Meantime, media are reporting that this year’s most highly anticipated IPO from Alibaba is getting delayed, after reports emerged last week that the e-commerce giant could make its first regulatory filing for a New York offering this week. Read Full Post…
Just days after worrisome signs emerged that the frothy market for Chinese IPOs in New York was losing steam, clinic operator iKang Healthcare (Nasdaq: KANG) has become the latest newly listed company to send out a mixed signal about the recent bull market for Chinese shares. iKang has just made its trading debut on the Nasdaq, posting a performance that was quite respectable though far from the big fireworks we were seeing late last year from most newly listed Chinese firms.
The showing marks the latest hint that the wave of bullish sentiment towards Chinese IPOs has crested, though anyone who can manage to list in the next 30 days could still do do respectably. Prospects for new listings after mid-May could be a bit more problematic, meaning we could see some companies accelerate their plans to get to market before then. Most notably, I do expect we’ll see upcoming mega-listings for Sina’s (Nasdaq: SINA) Weibo microblogging site and e-commerce giant JD.com make their debuts within the next 2 weeks. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 10. To view a full article or story, click on the link next to the headline.
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Goldman (NYSE: GS), Warburg Advance In China Huarong Sale: Sources (English article)
MIIT To Begin Private Sector Broadband Network Trials in H2 (English article)
