Bottom line: New listing plans by used car platform operator Uxin, EV battery maker Amperex and medical device maker Mindray should all do well, driven by strong growth potential and their leading positions in China.
Bumper crop of new China IPOs headed to market
The latest IPO season for Chinese firms is kicking into high gear on both sides of the Pacific, with announcement of several hot new offerings that each has a slightly different story to tell. At the head of the class is a new listing for used car platform operator Uxin, which is aiming to raise up to $500 million in New York.
That’s followed by a listing plan for electric vehicle battery maker Amperex, which is having to settle for a sharply-lower valuation than it had been originally seeking with a listing in China. Last but not least there’s medical device maker Mindray, which de-listed from New York and has just submitted a plan to list on China’s enterprise-style ChiNext board, after its initial plan to re-list on one of China’s larger main boards was rejected. Read Full Post…
Bottom line: The looming completion of buyouts for Qihoo 360 and Mindray Medical points to growing momentum for successful privatizations of other Chinese firms waiting to de-list from New York.
Qihoo, Mindray head back to China
Two of the largest in a wave of privatizations by US-listed Chinese firms have just taken big steps forward, with major new announcements from software security specialist Qihoo 360 (NYSE: QIHU) and medical device maker Mindray (NYSE: MR). One case has Qihoo announcing a formal date for a meeting where shareholders will vote on its plan to privatize the company. The other has Mindray announcing it has formally completed its own buyout plan, and has filed to have its shares de-listed from New York.
It’s quite significant that both of these plans are moving forward now, since China’s own stock markets where both Qihoo and Mindray hope to eventually re-list have been in a state of turmoil these days. That turmoil has seen the main Shanghai index tumble around 20 percent this year, and it’s quite possible that more turbulence lies ahead. Read Full Post…
Bottom line: A New York IPO by drug maker MediTech and Hong Kong listing by BOC Aviation will both meet with tepid reception and weak debuts, the former due to its small size and latter due to lack of big growth potential.
Drug maker China MediTech registers for NY IPO
A couple of IPOs are in the headlines as we head into the new week, led by a relatively sizable listing plan by drug maker China MediTech that could be the first significant new offering in New York this year by a Chinese firm. Meantime, Bank of China (HKEx: 3988; Shanghai: 601398) is also announcing plans to spin off and list its airline leasing unit, marking its latest asset sale as China’s banks scramble to raise cash to cushion their rapidly crumbling balance sheets.
Each of these listing stories is a bit different, reflecting the big differences between MediTech, a private company controlled by Hong Kong billionaire Li Ka-shing, and Bank of China, one of China’s big 4 state-run banks. MediTech’s choice of New York over Hong Kong probably reflects Li Ka-shing’s recent bearish stance on China, and also highlights the relative stability that New York offers over Hong Kong and China. Bank of China’s choice of Hong Kong reflects the preference by big state-run companies to make overseas listings in the former British colony, and Bank of China is itself also listed there. Read Full Post…
Bottom line: Mindray, E-House, Ming Yang and other US-listed Chinese companies that announce revised buyout offers by the end of this month stand a better than 70 percent chance of completing their privatizations.
Mindray shares leap on merger deal signing
After several months of silence, the wave of privatization bids by US-listed Chinese firms earlier this year is suddenly jumping back into the headlines with a series of new developments that indicate the more solid offers will move forward. The latest news has medical device maker Mindray (NYSE: MR) announcing it has just entered into a formal buyout deal, which even includes a price that’s slightly higher than its previous offer.
Mindray’s announcement comes the same week that wind power equipment maker Ming Yang (NYSE: MY) announced its own new privatization bid (previous post), and real estate services company E-House (NYSE: EJ) announced a lower price for its previously announced bid. (previous post) In both of those cases, skeptical investors reacted by dumping shares of both companies, causing them to trade well below the offer price. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 5. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Canadian Solar (Nasdaq: CSIQ) Submits Confidential YieldCo Registration Statement (PRNewswire)
Dali Foods Seeks Up to $1.34 Bln in Hong Kong IPO (English article)
Wanda Closing Dept Stores, Suning (Shenzhen: 002024) to Take Over Some (Chinese article)
Mindray (NYSE: MR) Enters into Definitive Merger Agreement for Going Private (PRNewswire)
Tongcheng Forms JV with Japanese Travel Agent HIS (Chinese article)
Bottom line: Mindray is likely to finally privatize following its announcement of a new, lowered offer price, kicking off a new round of revised bids for some of the other Chinese companies that received similar offers earlier this year.
Mindray lowers buyout offer price
In a move that didn’t get investors too excited, medical device maker Mindray (NYSE: MR) announced that a group aiming to privatize the company has lowered its earlier offer price to reflect recent declines in the company stock. Shareholders greeted the news by dumping Mindray stock, which ended the latest session at $23.60, or 13 percent below the revised offer price of $27 per American Depositary Share (ADS).
Frankly speaking, I’m quite impressed that this deal is moving forward at all, since I fully expect most of the 3 dozen similar privatization bids announced earlier this year to ultimately collapse. Mindray is the first of the huge field of buyout candidates to update investors on the status of its bid since shares of US-listed Chinese companies began to tank in sync with a much louder sell-off on China’s domestic stock markets in June. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 11. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Dell Says to Invest $125 Bln in China Over 5 Years (English article)
Lenovo (HKEx: 992) Starts OEM Smartphone Production for Other Brands – Report (Chinese article)
Mindray (NYSE: MR) Receives Revised Proposal to Acquire Company at $27 Per ADS (PRNewswire)
Didi Kuaidi Said to Join Alibaba, Tencent in Lyft Funding Deal (English article)
Tencent (HKEx: 700) WeBank Chief Cao Tong Resigns (Chinese article)
Following last week’s wild ride for Chinese stocks, now seems like a good opportunity to revisit the flurry of privatization bids for US-listed China Internet companies and how they’re faring. The list of headlines is led by reports that the biggest of the buyout bids for software security maker Qihoo 360 (NYSE: QIHU) is showing signs of unraveling, as investors balk at the widening gap between their original buyout offer and the company’s latest share price following last week’s sharp declines.
Meantime, another much smaller deal first announced at the height of the buyout wave in June has been quietly completed, resulting in the delisting of shares for China Mobile Games. Completion of this second deal just a couple of months after it was originally announced shows that such buyouts can still be done despite the big sell-offs in both China and New York that are making it hard to value such deals. Read Full Post…
Bottom line: The accelerating sell-off for US-listed China shares looks overblown and stocks are likely to rebound once the panic subsidies, but many previously announced buyout bids are still likely to collapse.
Ailing Chinese stocks infect US
The panic gripping China’s stock markets is spreading to US-listed Chinese shares, with even Internet blue chips like Baidu (Nasdaq: BIDU) and Alibaba (NYSE: BABA) getting sucked into the vortex of what looks like increasingly irrational selling. One media report is pointing out that tycoons like Tencent (HKEx: 700) and Alibaba founders Pony Ma and Jack Ma have seen their fortunes shrink by hundreds of millions or even more than a billion dollars in the latest trading day of the ongoing sell-off.
Another report cites China-based asset managers saying that a flood of privatization plans for China-listed US firms will still move forward despite the growing panic. Their optimism contrasts with growing skepticism among US investors who fear that many of the plans will collapse in tandem with China’s own crumbling stock markets. Anyone who agrees with those asset managers could make some big money right now, as the plummeting US stock prices mean many of these buyout candidates are now trading as much as 40 percent below their offer prices. Read Full Post…
Bottom line: An ongoing wave of buyout offers for US-listed Chinese firms is being funded by speculative money that will quickly evaporate when China’s stock market rally fizzles, causing some deals to collapse when that happens.
Gamblers fund privatization wave
It’s a new day, which means it’s time to take a look at the latest US-listed Chinese companies receiving privatization offers from opportunistic investors looking for bargains. Today it’s data center operator 21Vianet (Nasdaq: VNET) and beleaguered social networking site (SNS) operator Renren (NYSE: RENN) that are headed for the exit door.
I’ve been writing about this recent flurry of privatizations for the last few months, which is quickly turning into a flood as investors scramble to assemble deals to buy companies whose shares have languished on Wall Street. The idea is that these companies would be far more appreciated, and therefore get much higher valuations, from investors in their home China market, where an ongoing stock market rally has seen the main Shanghai index more than double over the last year. Read Full Post…
Bottom line: The ongoing privatization wave of Chinese firms abandoning New York listings is likely at or near a peak, with gaming and solar companies as some of the likeliest candidates to make new announcements.
E-House heads for exit door
The exodus from New York by neglected Chinese companies marches on this week, with online real estate company E-House (NYSE: EJ) becoming the latest to receive a management-led buyout offer. At the same time, online dating site Jiayuan (Nasdaq: DATE) has announced that a suitor who made a similar offer for the company in March has sharply raised its bid, following complaints that the original offer grossly undervalued the company.
When the history books are written, the second quarter of 2015 could well go down as the height of a wave of privatization bids for New York-listed Chinese firms, whose shares have languished in the last few years due to lack of interest from US investors. At the same time, many of those companies are casting an envious eye on China’s rallying stock markets, and are almost certainly hoping to re-list at home in the future. Read Full Post…
