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Huiyuan Juice shareholder withdraws - report

CHINA'S biggest pure juice maker Huiyuan may have suffered the first investment withdrawal by a major shareholder after the collapse of Coca-Cola's US$2.4 billion takeover offer.

US private equity fund Warburg Pincus declined to exercise an option to swap its convertible bonds for a 7-percent stake in China Huiyuan Juice Group Ltd, the Financial Times said today.

IPR Ogilvy, the public-relations agency hired by Huiyuan, refused to comment on the issue.

Warburg Pincus and France's Danone made cornerstone investments in Huiyuan months ahead of its listing in Hong Kong in February 2007. Each stood to collect lucrative returns if Coca-Cola's bid had succeeded.

However, the Ministry of Commerce blocked Coca-Cola's US$2.4-billion bid for Huiyuan in March this year after a three-month anti-monopoly review, fearing the nation's biggest takeover by a foreign company would hurt market competition.

Warburg Pincus exited its Huiyuan investment through the Royal Bank of Scotland, to whom it had loaned its convertible bonds in 2007, people familiar with the matter told the Financial Times.

They added that an option held by Warburg Pincus to reacquire the bonds and convert them into equity had expired in late May. RBS has since sold the holding into the market.

Zhu Xinli, chairman and president of the juice maker, said in April that several investors had approached Huiyuan about possible cooperation.

Earlier media reports said possible buyers might include Taiwan Uni-President, PepsiCo Inc, China Resources Enterprise and COFCO Ltd, China's largest diversified products and services supplier. But none of them have confirmed interest.


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