Bottom line: The large premium being offered in Trina Solar’s new buyout reflects a recent flood of private equity chasing privatization deals for US-listed Chinese firms, and could breathe new life into many previously announced bids that have become dormant.
Trina gets rich buyout offer
The homeward migration by US-listed Chinese firms has taken a turn into the new energy sector, with solar panel maker Trina (NYSE: TSL) becoming the first major player in the space to announce a management-led buyout offer. Throughout the current round of buyouts that has seen some 3 dozen US-listed Chinese companies announce privatization bids this year, few have come in the new energy sector that includes about a half dozen of China’s top solar panel makers listed in New York.
That’s not to say that New York has been a comfortable place for these companies. Most of the big names saw their shares soar in their first few years in New York, only to watch them tumble between 2011 and 2013 as panel prices plunged due to massive oversupply. That downturn saw the departure of 2 of the sector’s biggest names from Wall Street, though the exit of Suntech and LDK was prompted by bankruptcy rather than privatization. Read Full Post…
Bottom line: Hong Kong’s IPO market will heat up in the first quarter of next year for non-financial Chinese offerings, while privatizations of Chinese firms from New York are likely to accelerate at raised offering prices.
Taomee, Wuxi Pharma join homeward migration
A series of new listings in Hong Kong and de-listings from New York are heating up the headlines as we head toward year-end, reflecting 2 of the major themes for 2015 IPOs. Hong Kong hasn’t exactly been a hotbed for new listings this year, but has been gaining recent momentum that includes news of a $300 million planned IPO by hotpot chain Haidilao. At the same time, other reports are saying that Bank of Zhengzhou has just launched its own Hong Kong IPO, spotlighting another trend that has seen a flurry of mainland Chinese banks try to tap the market to bolster their financially-stretched balance sheets.
Meantime across the Pacific in New York, children’s website Taomee (NYSE: TAOM) and drug maker Wuxi PharmaTech (NYSE: WX) have come closer to completing previously announced privatization plans, as part of a broader exodus of Chinese companies from the US. The former case has Taomee announcing it has formally signed a buyout deal to privatize the company, and Wuxi Pharma saying it has completed its own privatization. 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…
The following press releases and media reports about Chinese companies were carried on December 8. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Taiwan’s TSMC (Taipei: 2330) to Build $3 Bln Chip Plant in Nanjing (Chinese article)
Homeinns (Nasdaq: HMIN) Enters into Definitive Merger Agreement (PRNewswire)
Alibaba’s (NYSE: BABA) AliExpress to Collect Annual Service Fee (English article)
Unicom (HKEx: 763) Announces Launch of Wo 4G+, to Explore Network Sharing (HKEx Announcement)
Huayi Bros (Shenzhen: 300027) Pays 1 Bln Yuan for 70 Pct of Feng Xiaogang’s Firm (Chinese article)
Bottom line: A new alliance between some of China’s largest hotel operators is the latest reaction to Ctrip’s growing clout in the travel services sector, and could lead the anti-trust regulator to take remedial action next year.
Hotel operators band together against Ctrip
An increasingly powerful Ctrip(Nasdaq: CTRP) is in the headlines as the new week begins, with word that some of China’s top hotel operators are banding together to protest what they see as unreasonable demands by the online travel services giant. News of this action is once again spotlighting Ctrip’s recent purchase of big stakes in nearly all of its major rivals, in a bid to reduce the rampant competition that has plagued the industry over the last 2 years.
I wrote about this issue just last week, when media reported that Ctrip was in talks to take a stake in travel package site operator Tuniu (Nasdaq: TOUR), one of the few major players that doesn’t have an equity alliance with Ctrip. (previous post) I observed that such a tie-up would help Ctrip by neutering one of its last major domestic rivals. That could ultimately draw the attention of China’s anti-trust regulator, which until now hasn’t taken any action to break-up near monopolies in many of the country’s Internet spaces. Read Full Post…
Bottom line: Jin Jiang’s pursuit of Shenzhen-based Vienna Hotel Group, combined with other recent M&A, could vault it to China’s leading hotel operator, though its sudden rapid expansion looks at least partly politically motivated.
Jin Jiang aims high with Vienna Hotel talks
Shanghai-based hotel operator Jin Jiang’s (HKEx: 2006; Shanghai: 600754) recent appetite for M&A continues to grow, with word that the company is in talks to buy a Shenzhen-based rival in a deal that would boost its hotel count by a third. A successful purchase of the privately held Vienna Hotel Group would mark the latest mega-purchase by Jin Jiang, which has suddenly emerged as China’s hot hotel company to watch.
Jin Jiang is certainly a household name in my adopted hometown of Shanghai, and this latest deal, when combined with others, would move the company into the ranks of one of China’s top 5 operators and the only one with a global presence. There’s only one problem with all of this, namely that Jin Jiang is one of the only top players that’s a state-run company. That contrasts sharply with other leading names like Homeinns (NYSE: HMIN), China Lodging (Nasdaq: HTHT) and Plateno, that are all privately owned. Read Full Post…
Bottom line: Jin Jiang’s purchase of a large Chinese hotel operator reflects its ambitions to become a leading player in China’s slowing market, though it could be undermined by its roots as a state-run company.
Jin Jiang to take control of Plateno
We’re finally seeing some big consolidation start to happen in China’s crowded hotel industry, with reports that Shanghai-based operator Jin Jiang (HKEx: 2006; Shanghai: 600754) is near a deal to buy the parent of formerly New York-listed 7 Days. The move comes just 7 months after Jin Jiang made another major purchase in Europe, and signals the company is clearly becoming a player to watch in China’s lodging space.
China’s hotel industry is undergoing some major changes right now, as the market suffers from oversupply created during a major build-up in the first decade of the 21st century. Leading player Homeinns (Nasdaq: HMIN) is in the process of privatizing after its stock languished on Wall Street due to lackluster growth prospects. China Lodging Group (Nasdaq: HTHT), operator of the Hanting chain, also made a major move late last year when it announced a major tie-up with French hotel giant Accor (Paris: AC). (previous post) Read Full Post…
Bottom line: HNA’s purchase of a stake in a small US hotel chain could presage a larger buyout bid for the company in partnership with a Chinese operator looking to expand abroad.
HNA checks in to Red Lion
We’ll take a break today from all the recent mega-deals involving Chinese firms, and focus our attention on a much smaller hotel purchase by private equity high flyer HNA Group. Frankly speaking, I find this new investment in US hotelier Red Lion Hotels (NYSE: RLH) a bit puzzling, as the actual size of the deal is very small and hardly worthwhile for a leading Chinese private equity investor like HNA. But that said, global real estate and hotels in particular have emerged as a hot commodity for big Chinese investors over the last year, meaning this particular deal could presage a larger purchase in the sector by HNA as it tests out the market. Read Full Post…
Bottom line: A new strategic investment in LightInTheBox by a major shoemaker is a vote of confidence in its turnaround story, while Bona Film’s buyout offer caps a week of record privatization activity for US-listed Chinese firms.
LightInTheBox gets new strategic partner
Last week’s privatization frenzy for US-listed Chinese firms saw one more company join the queue on the final day of the week, with movie maker Bona Film (Nasdaq: BONA) adding its name to the list of companies looking to end their relationship with fickle New York investors. That final offer brought the number of US-listed Chinese firms receiving buyout offers last week to 5, which must surely be a record for such bids in a single week.
Meantime, another interesting deal has seen underperforming e-commerce company LightInTheBox (NYSE: LITB) receive its own big new investment from one of China’s leading shoemakers. That deal saw Aokang Shoes (Shanghai: 603001) buy about a quarter of LightInTheBox’s shares, hinting at a major new direction for the foreign-focused e-commerce company and also implying it’s unlikely to de-list from New York anytime soon. Read Full Post…
Bottom line: A new management-led privatization bid for Homeinns and many other similar recent plans could stand a 50-50 chance of failing if they don’t complete the process before China’s stock market rally ends.
Homeinns joins privatization queue
Leading budget hotel chain Homeinns (Nasdaq: HMIN) has become the latest US-listed Chinese company to receive a buyout offer, capping a record week that has seen at least 4 such bids. In the past, 4 privatizations in a 6-month period would be considered big, even though such bids have been coming at a slow trickle over the last 3 years for Chinese companies whose shares have languished on Wall Street. But that tickle has turned into a flood these last 2 months, fueled mostly by greed, as company owners look enviously at China’s rallying stock markets that have more than doubled over the last year. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 12. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Homeinns (Nasdaq: HMIN) Announces Receipt of “Going Private” Proposal (PRNewswire)
Integrated Silicon (Nasdaq: ISSI) Agrees To Be Bought By China’s Uphill (English article)
Xiaomi Invested 1.8 Bln Yuan in its Content Business Since November 2014 (English article)
Qualcomm (Nasdaq: QCOM) Greater China President Resigns for Job at Xiaomi (Chinese article)
Alibaba (NYSE: BABA) Chief Jack Ma Says No Plans to Buy Yahoo, eBay (Chinese article)
