I will cover three Chinese companies with going private proposal announced in May in this article. All of these deals are yet to be closed.
1. Yucheng Technologies Limited (YTEC) is a leading IT service provider to the Chinese financial services providers. Headquartered in Beijing, China, Yucheng services clients from its nationwide network with approximately 2,800 employees. Yucheng provides a comprehensive suite of IT solutions to Chinese Banks, including: (i) Channel Solutions, such as e-banking and call centers; (ii) Business Solutions, such as core banking systems and loan management; and (III) M anagement Solutions, such as risk analytics and business intelligence. The independent research firm IDC named Yucheng the No. 1 market share leader in China's Banking IT solution market in 2010.
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On May 21, 2012, Yucheng Technologies announced that its board of directors has received a preliminary, non-binding proposal from Mr. Weidong Hong, chairman of the board and chief executive officer of Yucheng, to acquire all of the outstanding ordinary shares of the company not currently owned, legally or beneficially, by Mr. Hong and companies controlled by Mr. Hong in cash at a proposed price of $3.80 per ordinary share. Mr. Hong currently beneficially owns approximately 16.1% of the company's ordinary shares.
2. China Nuokang Bio-Pharmaceutical Inc. (NKBP) is a leading, fully integrated, profitable biopharmaceutical company focused on researching, developing, manufacturing and marketing hematological and cardiovascular products. The company sells a portfolio of 14 products, which includes principal products Baquting, a flagship hemocoagulase, and Aiduo, a cardiovascular stress imaging agent. The company's product pipeline includes product candidates under development in hematological, cardiovascular and cerebrovascular disease diagnosis, treatment and prevention.
On May 9, 2012, China Nuokang Bio-Pharmaceutical announced that its board of directors has received a preliminary, non-binding proposal from Mr. Baizhong Xue, chairman of the board and chief executive officer of Nuokang, to acquire all of the outstanding ordinary shares of the company not currently owned, legally or beneficially, by Mr. Xue and companies controlled by Mr. Xue in cash at a proposed price of $5.80 per American depositary share (each outstanding Nuokang American depositary share represents eight Nuokang ordinary shares). Mr. Xue currently beneficially owns approximately 61.2% of the company's ordinary shares (excluding share options of the company).
3. China Mass Media Corp. (CMM) is a television advertising company in China. The company provides a full range of advertising services, including advertising agency services, creative production services, public service announcement sponsorship services, and other value added services.
On May 4, 2012, China Mass Media announced that its Board of Directors has received a non-binding proposal letter from Mr. Shengcheng Wang, the controlling shareholder of the company, pursuant to which Mr. Wang proposes to acquire (i) ADSs of the company held by public investors for cash at not more than US$5.0 per ADS; and (ii) options issued under the 2008 Equity Incentive Scheme of the company for cash at not more than US$0.0167 per option.
Here is a table with these three companies. China Mass Media offers the highest potential gain for investors out of these three stocks.
|Company||Share price on July 3||Offer price|
|China Mass Media||$3.80||$5|
Disclosure: I am long CMM.