Tag Archives: TPG

Beyondsoft Eyes Camelot, Bidding War Coming?

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Beyondsoft weighs bid for Camelot

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…

AsiaInfo-Linkage Buyout: A Lawsuit Magnet

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I’ve been following China company news for quite a while, so I’m quite accustomed to seeing law firms file the occasional shareholder lawsuit when a company’s stock price falls on unexpected bad news. But a flood of announcements these last few days threatening lawsuits related to the new buyout offer for telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA) has surprised even me, potentially derailing the deal as suspicion grows of insider activity. Read Full Post…

AsiaInfo: Buyout Dead? 亚信科技：收购告吹？

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Despite reporting solid profit growth, telecoms software maker AsiaInfo’s (Nasdaq: ASIA) latest quarterly earnings report was more significant for what it did NOT contain, namely any mention of an ongoing plan to sell the company. Does this mean the deal is dead? In my view, the lack of any news on what once looked like a lively bidding war could indeed mean that buyers are no longer interested in AsiaInfo, perhaps because the company’s financials weren’t as attractive as many thought they might be or because the company wanted too big a premium for its shares.

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AsiaInfo Gets More Private Equity Interest 多家私募基金有意收购亚信联创

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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.

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News Digest: June 16-18, 2012 报摘： 2012年6月16-18日

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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.

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◙ Burger King Continues Aggressive Global Expansion with Accelerated Growth in China (Businesswire)

◙ Tencent (HKEx: 700) Vice President, Soso General Manager Resign – Source (English article)

◙ Agricultural Bank of China (HKEx: 1288) Received License to Operate NY Branch (Businesswire)

◙ Silverlake, TPG, Primavera Line Up On AsiaInfo (Nasdaq: ASIA) – Sources (English article)

◙ Deloitte Exec: Lenovo’s (HKEx: 992) IBM PC Purchase Didn’t Really Succeed (Chinese article)

Advice to SMIC: Stay Away From Elpida 中芯国际应远离尔必达

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I’ll admit that I secretly am cheering for a successful turnaround at SMIC (HKEx: 981; NYSE: SMI), a perennial underdog to its better-run Taiwanese rivals, which is why I’m a bit disappointed at the latest reports that say that China’s top chipmaker is considering a bid to buy some operations from bankrupt Japanese DRAM maker Elpida. Of course there’s a chance that the news, which was reported in Japanese media, isn’t true, which would be a relief as this purchase makes little or no sense in my view. But I suspect there may be some truth to the news, which would be a big mistake for SMIC if it succeeded in such a purchase. Let’s take a look at the actual news, which says that Hony Capital, a major Chinese high-tech private equity firm, wants to buy the bankrupt Elpida, and then would sell one of Elpida’s DRAM plants in Hisroshima to SMIC. (English article; Chinese article) The report also says one other plan being discussed would have SMIC come in and simply operate the plant, while Hony would presumably remain the owner. This latest report follows another one last month, when Japanese media first broke the news that Hony and US private equity firm TPG were teaming up to make a bid for Elpida, which declared bankruptcy earlier this year following years of losses in the ultra competitive global memory chip market. (previous post) What’s new in this latest report is the inclusion of SMIC in this potential buyout plan. For those who don’t follow SMIC that closely, the company was launched more than a decade ago with big hopes for challenging Taiwanese leaders TSMC (Taipei: 2330; NYSE: TSM) and UMC (Taipei: 2303; NYSE: UMC) for a share of the lucrative global market for made-to-order microchips that power everything from LCD televisions to cellphones. Those hopes were never quite realized, largely due to poor management that led SMIC to report a steady stream of losses for most of its life as a publicly traded company. Things finally appeared to be improving after a change in top management nearly 2 years ago, but then the company stumbled again following an internal power struggle last summer. (previous post) That struggle was finally resolved and the company again seemed to be making progress on a turnaround, which, in my view, could now seriously be jeopardized if SMIC buys or tries to operate some of Elpida’s assets. Such assets would be a huge distraction for SMIC, which has no experience operating outside its home China market. Furthermore, the DRAM sector is already super competitive, which is what drove Elpida into bankruptcy in the first place, and I have little confidence that SMIC could succeed in turning around this company, which probably suffered from high costs due to its location in Japan. Obviously no deal has been reached yet, but I still fear that SMIC may be pursuing such a purchase as new CEO Tzu-Yin Chiu, who assumed his position last August, tries to chart a new course for the company. But an Elpida purchase is not the correct route back to profits, and in fact could actually prolong SMIC’s turnaround, leaving it in the red for many years to come.

Bottom line: SMIC should stay away from Elpida, or risk prolonging its losses for years to come if it actually buys or takes over some operations from the bankrupt Japanese firm.

Related postings 相关文章:

◙ SMIC: Still Tethered to the State 中芯国际：仍然依赖国家

◙ SMIC Puts Turmoil Behind It — Again 中芯国际又走出内讧

◙ Chip Merger Near, More Consolidation Ahead? 华虹NEC和宏力半导体合并预示未来或有更多整合

Lenovo Sister Firm Looks to Japan, Taobao Quits “围城”日本：弘毅想冲进去 淘宝想撤出来

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Japan’s foreign minister was in China yesterday on an official visit, so I thought I’d start the week with 2 items on Chinese companies in the notoriously difficult Japanese market, including an interesting move into the chip sector by a sister company of PC giant Lenovo (HKEx: 992) and a hasty retreat by e-commerce giant Alibaba. Let’s start with the more intriguing of the items, which is seeing Hony Capital, the high-profile technology investment arm of Lenovo parent Legend Group, pairing with US private equity giant TPG Capital to make a planned bid for bankrupt memory chipmaker Elpida (Tokyo: 6665), according to a Japanese media report. (English article) If they made a bid, the pair would join 2 other suitors, Korea’s Hynix Semiconductor (Seoul: 000660) and US-based Micron (NYSE: MU) in pursuing the Japanese company that controls 12 percent of the global DRAM market. Frankly speaking, Hynix and Micron look like much better suitors for Elpida, as both are competitors that could consolidate the Japanese company into their own operations for an industry that has been in desperate need of consolidation for the last 5 or 6 years. But the Hony-TPG pairing does include one interesting element, namely the Lenovo connection. Lenovo itself has been trying to break into Japan for years now, following its 2005 purchase of IBM’s PC assets that included sales and distribution networks in Japan. More recently Lenovo has taken over the PC assets of NEC (Tokyo: 6701), and has discussed setting up a manufacturing base in Japan. (previous post) A successful bid for Elpida could theoretically provide Lenovo with a strong DRAM supply for its Japan-based business. Still, I would be wary of such a purchase since Lenovo has little or no experience in running a DRAM operation, and it’s unclear what kind of savings it could achieve by combining its Japanese PC business with Elpida’s money-losing memory business. Moving on, the other Japanese news bit has seen Alibaba’s Taobao service officially shutter its Japanese shopping channel that was operating on a platform run by Yahoo Japan (Tokyo: 4689). (Chinese article) Alibaba made a relatively low-key move into Japan several years ago, seeking to take advantage of ties to one of its earliest investors, Japan’s Softbank (Japan: 9984), which is also the main investor in Yahoo Japan along with Yahoo (Nasdaq: YHOO) itself. Clearly the market hasn’t proven as easy to penetrate as Alibaba had hoped, and the media report even says that sales on the Taobao Japan channel were below the company’s targets. This withdrawal doesn’t surprise me at all, as Chinese firms of all types have had a difficult time in the Japanese market, which has become famous for its impenetrability by foreign firms. The other big Chinese web firm trying to crack the market is search leader Baidu (Nasdaq: BIDU), which has spent millions of dollars over the last 3 years on a Japanese search portal with little results to show for that investment. This Taobao withdrawal from the market was completely predictable, and I wouldn’t be surprised at all to see a similar retreat by Baidu within the next 12 months.

Bottom line: A bid by a Lenovo sister company for bankrupt Japanese chipmaker Elpida is likely to fail, while Baidu is likely to follow a recent Alibaba retreat from Japan in the next 12 months.

Related postings 相关文章:

◙ Lenovo Considers Japan Production 联想向日本转移制造业务为明智公关手段

◙ NEC China Cellphones: New Lenovo Tie-Up? NEC计划重回中国手机市场 或与联想联姻

◙ Baidu Dreams of Brazil 百度试水巴西

Investors to AsiaInfo: Let’s See Some Numbers 投资者对亚信创联并购案减失耐心

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There are several interesting items out there today on US-listed Chinese firms, led by a resounding investor yawn at news that telecoms software maker and acquisition target AsiaInfo-Linkage (Nasdaq: ASIA) is seeking more offers after a major Chinese investor made a surprise bid for the company last month. In separate but other noteworthy news, we’re getting some more financials that don’t look pretty from car rental specialist China Auto, which has filed to make a New York IPO, and are hearing about an ambitious global expansion plan from e-commerce giant 360Buy, which hopes to someday make a New York IPO to raise more than $1 billion. Let’s start with AsiaInfo-Linkage, which put out a statement on Monday saying it was seeking additional buyers after receiving an offer in February from an investment arm of China’s giant CITIC Group. (company announcement) AsiaInfo’s shares rallied after it announced the initial CITIC bid, and rose again after media reported that private equity firms including KKR and TPG had expressed interest in making competing offers. (previous post) But this latest announcement failed to excite anyone, with AsiaInfo’s shares actually dropping slightly in Monday trade even as the broader Nasdaq rallied nearly 2 percent, indicating investors may be growing impatient with all the talk and want to see some actual numbers. CITIC’s original offer price was never officially disclosed, so it’s not at all clear how much it bid and all we really know is that some media reports have said new bids could value the company at $1 billion or more, which is where the company’s current market capitalization now stands. Look for the stock to come under some pressure if no new concrete details come out soon. Moving on to other matters,  media are citing an executive from 360Buy, which also goes by the name Jingdong Mall, saying the company will set up several international sites this year to let overseas buyers purchase items on its site. This latest development, combined with similar recent announcements of major new hiring, reflect the fact that 360Buy has too much cash, after receiving over $1 billion last year in a record-high capital raising round for a privately held Internet company. The company is clearly coming under pressure from its new investors to use some of that cash to create an exciting story for a planned New York IPO, which could come this year or next. But its rapid growth is a bit worrisome, as such quick expansions frequently run into managerial and technical problems and end up creating more losses than new growth. Lastly there’s China Auto, which filed for a New York IPO early this year but has gone silent since then. Now Chinese media are reporting the company has made another IPO filing, in which it disclosed it has lost money over the last 3 years amid a rapid expansion and needs the money from an IPO to repay debt. (Chinese article) This is the first time we’ve gotten such detailed financials, and the money-losing element doesn’t bode well for the offering, following the disastrous launch last week of China’s first New York IPO this year for Vipshop (NYSE: VIPS). (previous post)

Bottom line: Investors are growing impatient with takeover target AsiaInfo-Linkage, and will put the stock under pressure until it reveals more details about potential buyout offers.

Related postings 相关文章:

◙ China Auto Wins 2012 Race For 1st US IPO 神州租车抢先成首个赴美IPO的中国企业

◙ China IPO Winter Goes On as Vipshop Flops 唯品会大跌，中国IPO冬季持续

◙ Debut Offshore IPO Looks Weak, But Not So Bad 阳光油砂上市首日表现差强人意

AsiaInfo Bidding War Erupts, More to Come 亚信联创收购战打响

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The confidence crisis for US-listed China stocks has taken an interesting twist with the start of a bidding war for AsiaInfo-Linkage (Nasdaq: ASIA), one of the oldest US-listed China firms. The development underscores the fact that despite questionable accounting practices at many smaller US-listed Chinese firms, there are still many good companies in the market that may look like good values for buyers wanting to take advantage of depressed share prices that have resulted in cheap valuations. On the IPO front, meanwhile, a steady stream of noise from e-commerce giant 360Buy, which also goes by the name Jingdong Mall, indicates the company may be getting close to making its first public filing for a public offering that it first announced plans for last fall. Let’s look at AsiaInfo  first, as the new bidding war could be the first in a new string of buyout offers for healthy US-listed Chinese firms whose shares have tumbled by 50 percent or more in the last year after a series of accounting scandals. Media are reporting that big-name US private equity firms including KKR and TPG are eying bids for AsiaInfo-Linkage that could value the company at $1 billion or more. (English article) That would be a big premium over its market value that stood at about $700 million when Chinese investor CITIC Capital made an offer to buy out AsiaInfo last month for an undisclosed sum. (previous post) AsiaInfo’s shares rose 11 percent to $12.95 after news of a potential bidding war came out yesterday, and its shares have risen considerably from December when they traded below $7. Of course it’s also worth noting the company’s shares traded above $30 less than 2 years ago, when Chinese tech and Internet stocks were still popular. Investors will be watching closely to see how this new bidding war evolves, and I would expect to see more offers emerging for other healthy companies that private equity firms see as undervalued at current market prices. Meantime, 360Buy has just said it will invest 3.5  billion yuan, or more than $500 million, to beef up its logistics systems, in the latest of a series of recent announcements to raise its profile in the run-up to a potential multibillion-dollar US IPO. (English article) The company earlier this week announced the official launch of its e-book service, and has recently brought in a series of experienced managers from other companies to make itself more attractive to overseas investors. I wouldn’t be surprised to see the 360Buy make its first public IPO filing by the end of March if stock markets remain strong, though it will probably attract limited investor interest due to stiff competition from not only domestic rivals like Dangdang (NYSE: DANG), but also aggressive foreign players in China like Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT), which is trying to acquire a controlling stake in local player Yihaodian.

Bottom line: A bidding war for AsiaInfo-Linkage could presage more such wars for US-listed Chinese firms whose shares have been hit by negative investor sentiment.

Related postings 相关文章:

◙ AsiaInfo, Xinhua in Latest Listings Shuffle 新华电视悄然上市 亚信联创或被摘牌

◙  E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

◙ 360Buy Heats Up E-Books, People’s Daily Goes to Market 京东商城高调进军电子书,人民网开启上市进程

News Digest: February 22, 2012 报摘： 2012年2月22日

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The following press releases and media reports about Chinese companies were carried on February 22. To view a full article or story, click on the link next to the headline.

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◙ Alibaba.com (HKEx: 1688) Reports Q4 Results, Announces Privatization Plan (Results; Plan announcement)

◙ US Power Firm AES (NYSE: AES) Eyes China Asset Sales: Sources (English article)

◙ Canadian Solar (Nasdaq: CSIQ) Raises Q4 Shipment Guidance to 430-440 MW (PRNewswire)

◙ KKR, TPG Among Firms Eyeing Nasdaq-listed AsiaInfo (Nasdaq: ASIA) -Sources (English article)

◙ Yingli Green Energy (NYSE: YGE) Pre-announces Preliminary Q4, Full Year Results (PRNewswire)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)