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PE fund exits from Huiyuan investment

A MAJOR investor has withdrawn from its investment in China's biggest pure juice maker Huiyuan after the collapse of Coca-Cola's US$2.4-billion takeover offer, the Financial Times said yesterday.

United States 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, according to the British newspaper. IPR Ogilvy, the public relations agency hired by Huiyuan, refused comment.

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

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

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

They said an option held by Warburg Pincus to reacquire the bonds and convert them into equity had expired late last month. RBS has since sold the holding on the market.

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

Earlier media reports said possible buyers may include Taiwan Uni-President and PepsiCo Inc.


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