The following press releases and news reports about China companies were carried on March 23. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL) Bets New 4-inch iPhone to Draw Converts in China, India (English article)
Huawei Matebook PCs Coming Soon, Lenovo (HKEx: 992) Rolls Out New Thinkbooks (Chinese article)
Opera CEO Says Didn’t Want to Sell Company to Qihoo (NYSE: QIHU) (Chinese article)
Qunar (Nasdaq: QUNR) Says Working with Airlines to Restore Online Ticketing (Chinese article)
CMC Invests Tens of Millions of Dollars in SoccerWorld Sports (Chinese article)
Bottom line: Anbang is almost certain to make a new counter bid for Starwood above Marriott’s latest offer, and will ultimately win the bidding war due to its determination to make an acquisition at any cost.
Marriott trumps Anbang bid for Starwood
The sudden bidding war for US hotel operator Starwood (NYSE: HOT) is rapidly intensifying, with hometown suitor Marriott (NYSE: MAR) sharply raising its original bid for the company to trump a more recent offer from Chinese insurer Anbang. The move surprised many, including myself, since the new bid represents a 10 percent raise from Marriott’s earlier offer for Starwood made late last year. I had predicted that Marriott might raise its original bid as much as 5 percent, but that it would ultimately shy away from getting into a real bidding war.
Starwood has said it will accept Marriott’s new offer and even signed a deal. But we should also point out it said just days ago it also said it would accept Anbang’s offer as well. So the major question now is whether Anbang will try to top Marriott with a new bid before an April 8 deadline. I suspect the answer to that question is “yes”, since Anbang seems determined to buy Starwood at any price. Read Full Post…
Bottom line: ZTE’s temporary relief from sanctions for illegally selling US products to Iran is probably contingent on its assistance in a broader probe of the matter, and could result in more arrests and sanctions against others in the case.
ZTE assisting in US probe
In a move that surprised me, Washington is indicating it might reduce the stiff punishment it previously announced for telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) for illegally selling US-made equipment to Iran. In the past, Washington has shown little tolerance for Chinese companies that break the rules, even though Beijing often protests such inflexibility.
But this time is slightly different from the past, since it involves a single company rather than an entire industry. Still, this kind of temporary relief does seem a bit unusual for Washington. Accordingly, I suspect that ZTE is quietly cooperating behind the scenes with an investigation that could ultimately incriminate many other companies and individuals that helped it to circumvent Washington’s rules prohibiting the sale of US-made networking equipment to Iran. Read Full Post…
The following press releases and news reports about China companies were carried on March 22. To view a full article or story, click on the link next to the headline.
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Marriott (NYSE: MAR) Wins Back Starwood (NYSE: HOT) With New Offer (English article)
US to Offer ZTE (HKEx: 763) ‘Temporary Relief’ on Export Curbs: Official (English article)
Alibaba (NYSE: BABA) Reaches 3 Trillion Yuan Milestone Even as China Slows (English article)
Bottom line: Anbang’s hiring of a consultant to gauge shareholder interest in its bid for Starwood indicates a lack of confidence in reaching a deal with Starwood’s management, and shows its offer is ultimately likely to fail.
Starwood preparing to reject Anbang?
Chinese insurer Anbang is quickly learning that money can’t buy you everything, following its surprise mega-bid for US hotel giant Starwood (NYSE: HOT), operator of the Sheraton and Westin brands. That’s my latest interpretation, following reports that Anbang has hired a professional proxy solicitor to gauge investor sentiment towards its $12.8 billion bid for Starwood that trumped a previous offer by US hotel giant Marriott (NYSE: MAR).
I said earlier this week that Starwood’s board and management were ultimately likely to reject the Anbang bid, and opt for a union with a partner like Marriott that could ensure its longer-term future. (previous post) This latest move implies that Anbang may be getting a cool reception from Starwood’s management, and is testing the waters to potentially take its bid directly to Starwood’s shareholders in what would become a hostile takeover bid. Read Full Post…
The following press releases and news reports about China companies were carried on March 18. To view a full article or story, click on the link next to the headline.
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Bottom line: ZTE will lose its appeal of tough US export sanctions for illegally selling high-tech equipment to Iran, as Washington sends a strong signal that companies engaging in such actions will face stiff punishment.
ZTE to appeal US sanctions
An increasingly frantic ZTE (HKEx: 763; Shenzhen: 000063) is working on several fronts in a bid to stop crippling US sanctions, after Washington determined the company illegally sold equipment to Iran. I used to be a strong supporter of compromise in China’s frequent trade conflicts with the west, and still believe that some form of compromise might be the best solution here.
But at the same time, the frequent tendency by Chinese companies to flout laws and agreements both at home and abroad shows that sometimes harsher measures are the only way to convince these firms to play by the rules. Accordingly, I do expect we could see Washington take a relatively tough stance against ZTE in this case, despite protests from Beijing and the potential for big disruption to the operations of one of China’s largest telecoms equipment makers. Read Full Post…
The following press releases and news reports about China companies were carried on March 17. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Said to Appeal US Export Ban After Lobby Efforts Fail (English article)
Ctrip (Nasdaq: CTRP) Reports Q4 and Full Year Results (PRNewswire)
BAIC, BYD, Dongfeng Motor to Use LeEco (Shenzhen: 300104) Car Internet System (Chinese article)
Terra Firma Rejects HNA Bids for Jet Leasing Group AWAS – Sources (English article)
ReneSola (NYSE: SOL) Announces Convertible Note and Share Repurchases (PRNewswire)
The following press releases and news reports about China companies were carried on March 16. To view a full article or story, click on the link next to the headline.
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Zoomlion (HKEx: 1157) Sweetens Offer for US Crane Maker Terex (NYSE: TEX): Sources (English article)
Anbang wins US Security Panel OK to Buy Fidelity & Guaranty (English article)
Midea (Shenzhen:000333) to Buy Toshiba (Tokyo: 6502) White Goods Unit – Source (Chinese article)
China’s Consumer Rights Show Trains Sights on Local Food-Delivery Site Ele.me (English article)
JD.Com (Nasdaq: JD) Gains on Alibaba as Spending Jumps, Profit Estimates Drop (English article)
Bottom line: IBM’s sale of its Lenovo shares isn’t surprising since it probably received the stock as part of a recent transaction between the pair, but still comes as the latest sign of no confidence in the struggling Chinese PC giant.
IBM dumps Lenovo shares
Things just keep getting worse for struggling PC maker and smartphone wannabe Lenovo (HKEx: 992). Just 2 weeks after new data showed the company’s smartphone sales plunged in its home China market at the end of last year, new reports are saying that US tech giant IBM (NYSE: IBM) is dumping the Lenovo shares that it received as part of a recent transaction between the pair of companies.
The amount of the sale doesn’t look that big, with IBM looking to sell about $150 million worth of Lenovo shares, the reports say. (English article; Chinese article) But it’s important to note those same shares were worth about twice as much in October 2014, which is when IBM probably first received the stock as part of a sale of its low-end server business to Lenovo for $2.1 billion. Read Full Post…
Bottom line: Minsheng Bank’s $1 billion deal to buy Quam could be on the brink of collapse, the victim of rapidly tumbling sentiment towards Chinese and Hong Kong brokerages amid China’s stock market sell-off.
Minsheng’s HK brokerage buy on brink of sinking?
What a difference a year makes. At this time last year stock brokers in China and nearby Hong Kong were a hot ticket, attracting billions of dollars as investors bet on their huge growth potential tied to booming stock markets in both places. But that enthusiasm has quickly evaporated as China’s stock markets undergo a massive correction, which may be a major factor behind the sputtering of a major acquisition in the space.
The deal I’m referring to is the previously announced purchase of Hong Kong brokerage Quam (HKEx: 952) by Minsheng Bank (HKEx: 1988; Shanghai: 601988), China’s oldest privately owned bank. Minsheng has just announced that a deadline for it to close the Quam investment, worth nearly $1 billion, has passed without closure, hinting the deal may be on the brink of collapse. Read Full Post…
