Bottom line: Alibaba’s Koubei is unlikely to gain major traction despite its $1.1 billion in new funding, due to its late arrival to a crowded O2O take-out dining space already dominated by Baidu, Ele.me and Meituan-Dianping.
Koubei raises $1.1 billion
The longer I stay in China, the more the latest stories coming from the Internet sector look like I’ve seen them before. That’s certainly the case with Koubei, the Alibaba (NYSE: BABA) online-to-offline (O2O) take-out dining delivery service, which is close to landing a fresh $1.1 billion in new funding. In this case, Alibaba’s extremely late arrival to the space looks a lot like its vain attempt to play catch-up to Tencent’s (HKEx: 700) WeChat with a service called Laiwang back in 2013. Read Full Post…
Bottom line: Yum and McDonald’s are likely to complete spin-offs of their China units by year end, offering a new business template for multinationals that should be encouraged with incentives from Beijing.
Yum names board for China unit
Separate plans by fast food giants KFC and McDonald’s (NYSE: MCD) to spin off their China businesses into separate companies were in the headlines last week, in a new trend that could see other big multinationals take similar steps to address the market’s huge size and unique qualities. Each company is using a slightly different strategy, with KFC parent Yum Brands (NYSE: YUM) choosing a key strategic partner and separate listing for its China unit. By comparison, McDonald’s is simply selling its China stores to a strategic partner in a franchise-style arrangement, while maintaining control of its bigger China operations. Read Full Post…
Bottom line: Yum’s selection of Primavera and Ant Financial to anchor its China unit spin-off look like reasonable choices, as it tries to put the business back on solid footing before a New York IPO that should enjoy modest success.
Yum China sells stake to Primavera, Ant
After months of talks and speculation, fast food giant Yum Brands (NYSE: YUM) has announced that two firms with distinctly financial backgrounds will anchor its plan to spin off its China business. The larger of the investors, private equity firm Primavera, doesn’t look extremely exciting strategically, as it’s mostly a private equity investor with little experience in the tough retail sector. The second investor, Alibaba’s (NYSE: BABA) Ant Financial affiliate, looks a little more interesting since its core Alipay electronic payments service could help to propel Yum’s aging KFC and Pizza Hut brands into the modern era. Read Full Post…
The following press releases and news reports about China companies were carried on September 3-5. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
China Opens Antitrust Investigation Into Uber’s Deal with Didi (English article)
Yum (NYSE: YUM) to Sell Stake in China Unit to Ant, Primavera Ahead of Spinoff (English article)
Bottom line: Postal Savings Bank’s IPO is likely to get a moderately strong reception and come close to the upper end of its $10 billion target, while Yum China’s IPO is unlikely to come until the end of this year at earliest.
Yum China spin off plans hit delays
What’s likely to become the world’s biggest IPO in 2 years has just officially launched in Hong Kong, with word that China’s Postal Savings Bank has made its first filing for an offering that could raise up to $10 billion. Meantime, another high-profile IPO by the Chinese unit of fast-food giant Yum Brands (NYSE: YUM) is getting hit by delays, as operator of the KFC chain seeks key local backers in the run-up to a listing that could also come in Hong Kong. The Yum offering could also be quite large at around $2 billion, though it appears the deal may not come now until the end of this year or may even get pushed back to 2017. Read Full Post…
Big privatization deals are never easy, as we’re seeing with signs that a buyout plan launched by the controlling shareholder of online game firm Shanda Games (Nasdaq: GAME) is rapidly unraveling. Shanda Games’ parent, Shanda Interactive, launched the plan back in January, as part of a broader wave of similar privatizations for undervalued US-listed Chinese companies. Shanda Interactive is saying the buyout is still alive, though other shareholders are clearly growing skeptical, based on Shanda Games latest stock price. Read Full Post…
One of China’s biggest online entertainment companies is rapidly disappearing from the publicly listed realm, with word that Shanda Games (Nasdaq: GAME) has become the latest US-listed Chinese firm to receive a management-led buyout offer. The news came as a surprise to me, since many believed that Shanda’s parent, Shanda Interactive, wanted to follow a strategy of listing its various units individually after it made its own privatization 2 years ago. But from another angle, this de-listing plan isn’t all that unexpected since Shanda Games’ shares have languished since they were first listed in 2009. Read Full Post…
One of my well-informed sources tells me that Shenzhen-listed IT outsourcing firm Beyondsoft (Shenzhen: 002649) is weighing a bid for rival Camelot Information Systems (NYSE: CIS), in what would be an interesting twist to the ongoing exodus of Chinese firms from US stock exchanges. If this information is true, it could mean we may start to see some bidding wars among private buyers for the growing number of Chinese firms that are abandoning their New York listings due to low valuations. Read Full Post…
After several months with no news following an unsolicited buyout offer for AsiaInfo-Linkage (Nasdaq: ASIA), the telecoms software maker has burst back into the headlines with reports that it has attracted several more new potential buyers as it seeks to pump up its valuation amid a broader weak market for US-listed China stocks. This new signs of interest, which includes some major global private equity firms, could be a good sign for the broader sector of battered New York-traded Chinese stocks, as it means there is clearly some strong institutional investor interest in better-run companies despite weak broader market sentiment, which means we could see some other interesting buy-out offers in the months ahead.
The following press releases and media reports about Chinese companies were carried on June 16-18. To view a full article or story, click on the link next to the headline.
