Stakes in Gome battle mount
By Wang Weini |
August 28, 2010, Saturday
|
Print Edition
Print Edition
THE battle for control of Gome escalated after its jailed founder, Huang Guangyu, reportedly increased his stake in the home appliance retailer as he prepares to battle against its board of directors.
Huang, also former chairman of Gome Electrical Appliances Holding, has bought 120 million shares, or 0.8 percent, in the company at HK$2.42 (31 US cents) each to increase his stake to 34.78 percent, Sina.com said yesterday.
He will continue to increase his stake in Gome by as much as 2 percent, which is permitted by the Hong Kong stock exchange, to prevent his holding from being diluted by the issue of new shares, the website quoted unnamed sources as saying.
Meanwhile, Chen Xiao, current chairman of Gome, was said to be seeking support from institutional investors, including JPMorgan, FIL Ltd and The Northern Trust Co, as he aims to consolidate his position in the troubled company.
Huang, once the richest man on the Chinese mainland, was sentenced to 14 years in jail this year on bribery and insider trading charges.
In a letter, Huang accused Chen of attempting to steal Gome from its founder while the former boss is battling the biggest crisis of his business life. Huang also lambasted Chen for trying to sell out to United States-based Bain Capital and for losing market share to bitter rival Suning.
Huang has demanded that the board oust Chen and also sought to overturn its authorization to issue up to 20 percent in new shares, which would dilute his holding.
Both sides are appealing for support from smaller shareholders ahead of a special meeting scheduled on September 28.
Chen holds 1.47 percent of Gome shares while Bain Capital, which backs Chen, owns Gome convertible bonds that represent about 9 percent of shares. Bain is expected to convert the bonds into shares before the meeting.
At the end of June, Gome had 740 stores nationwide. Suning added 149 outlets this year to boost its number to 1,075.
Huang, also former chairman of Gome Electrical Appliances Holding, has bought 120 million shares, or 0.8 percent, in the company at HK$2.42 (31 US cents) each to increase his stake to 34.78 percent, Sina.com said yesterday.
He will continue to increase his stake in Gome by as much as 2 percent, which is permitted by the Hong Kong stock exchange, to prevent his holding from being diluted by the issue of new shares, the website quoted unnamed sources as saying.
Meanwhile, Chen Xiao, current chairman of Gome, was said to be seeking support from institutional investors, including JPMorgan, FIL Ltd and The Northern Trust Co, as he aims to consolidate his position in the troubled company.
Huang, once the richest man on the Chinese mainland, was sentenced to 14 years in jail this year on bribery and insider trading charges.
In a letter, Huang accused Chen of attempting to steal Gome from its founder while the former boss is battling the biggest crisis of his business life. Huang also lambasted Chen for trying to sell out to United States-based Bain Capital and for losing market share to bitter rival Suning.
Huang has demanded that the board oust Chen and also sought to overturn its authorization to issue up to 20 percent in new shares, which would dilute his holding.
Both sides are appealing for support from smaller shareholders ahead of a special meeting scheduled on September 28.
Chen holds 1.47 percent of Gome shares while Bain Capital, which backs Chen, owns Gome convertible bonds that represent about 9 percent of shares. Bain is expected to convert the bonds into shares before the meeting.
At the end of June, Gome had 740 stores nationwide. Suning added 149 outlets this year to boost its number to 1,075.
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