Chinese sportswear retailer Pou Sheng Int'l receives $1.4 bln privatisation offer
(Adds details, background)
By Kane Wu
HONG KONG, Jan 21 (Reuters) - Chinese sportswear retailer
Pou Sheng International (Holdings) Ltd has received a
proposal from Pou Chen Corp to be taken private that values it
at around $11 billion ($1.4 billion), it said in a stock
exchange filing on Sunday.
Pou Chen Corp has offered Pou Sheng International a
cancellation price of HK$2.03 per share, which represents a
premium of around 31.82 percent over Pou Sheng's last closing
Pou Sheng International shareholder Yue Yuen Industrial
(Holdings) Ltd will sell its 62.41 percent stake in
Pou Sheng to Pou Chen as part of the proposal at the
cancellation price for a total of HK$6.8 billion, according to
the stock filing. Pou Chen owns 49.99 percent of Yue Yuen
The move follows a similar transaction last April, when a
consortium led by private equity firms Hillhouse Capital Group
and CDH Investments offered to buy out Hong Kong-listed Belle
International Holdings Ltd in a $6.8 billion deal, as retailers
seek new growth from e-commerce channels and tackle competition
from online rivals.
The proposal said the sporting goods industry "is
experiencing unprecedented changes and challenges" from the rise
of online shopping which has changed customers' expectations and
increased market competition.
Pou Sheng International would need "significant investments"
to transform its business and would have flexibility and more
advantageous financing if it were to be taken private, according
to the proposal.
The boards of Pou Chen and Pou Sheng believe Pou Sheng’s
listing status is ineffective in providing a sufficient source
of funding for the company's business and growth, the proposal
Pou Chen, a leading Taiwanese footwear manufacturer, will
not increase the offer price, according to the stock filing.
Citigroup is acting as financial advisor to Pou Chen.
(Reporting by Kane Wu; Editing by Susan Fenton)
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