Shanghai Pingpu buys Jahwa
By Lu Nengneng |
November 8, 2011, Tuesday
|
Print Edition
Print Edition
SHANGHAI Pingpu Investment, a subsidiary of Ping An Insurance (Group), has beaten Hainan Airlines in the bidding to acquire state-owned cosmetics maker Shanghai Jahwa.
The State-owned Assets Supervision and Administration Commission of Shanghai has given approval to Shanghai Pingpu Investment as the company's new owner, Jahwa's Chairman Ge Wenyao said yesterday.
Ge said the takeover details, including the price, will be disclosed after the government gives the green light.
Jahwa is expected to resume trading after yesterday's suspension, the first time since it was priced at 5.1 billion yuan (US$780 million) by the government at the Shanghai United Assets and Equity Exchange in September.
Pingpu Investment and Hainan Airlines qualified for the final bidding while Shanghai Fosun Industrial Investment, a subsidiary of Hong Kong-listed Fosun International, withdrew from the acquisition process after failing to put down the required deposit.
To rule out the scenario of bidders using Jahwa as a fundraising tool, the company had blocked ownership transfer for five years, and threw a poison pill last week, vowing no re-financing plans over the next three years.
Analysts said the requirements were largely designed to stop Hainan Airlines, which could have used Jahwa to extend its aggressive leveraged buyout. The company, however, pledged in its bid proposal to market Jahwa's brands with its resources in the airlines, real estate, and tourism sectors.
According to a source close to the deal, Pingpu Investment has been long favored by Jahwa because its investment capability, coupled with its extensive sales network and presence in online retail, can accelerate Jahwa's expansion in the fashion industry.
Pingpu Investment plans to inject 1 billion yuan into acquiring three to four high-end brands by 2015 to extend Jahwa's product lines, and another 1 billion yuan to take the company beyond its traditional cosmetics business into jewelry, watch, footwear and clothing.
The new owner said it will do its best to get Jahwa a direct sales license by 2013, and use the 450,000-people sales team of its parent firm to aggressively launch the new sales channel.
And Yihaodian, a growing online department store in which Ping An Insurance holds a stake, will be at the forefront for Jahwa to try out its online branding and sales ideas.
The State-owned Assets Supervision and Administration Commission of Shanghai has given approval to Shanghai Pingpu Investment as the company's new owner, Jahwa's Chairman Ge Wenyao said yesterday.
Ge said the takeover details, including the price, will be disclosed after the government gives the green light.
Jahwa is expected to resume trading after yesterday's suspension, the first time since it was priced at 5.1 billion yuan (US$780 million) by the government at the Shanghai United Assets and Equity Exchange in September.
Pingpu Investment and Hainan Airlines qualified for the final bidding while Shanghai Fosun Industrial Investment, a subsidiary of Hong Kong-listed Fosun International, withdrew from the acquisition process after failing to put down the required deposit.
To rule out the scenario of bidders using Jahwa as a fundraising tool, the company had blocked ownership transfer for five years, and threw a poison pill last week, vowing no re-financing plans over the next three years.
Analysts said the requirements were largely designed to stop Hainan Airlines, which could have used Jahwa to extend its aggressive leveraged buyout. The company, however, pledged in its bid proposal to market Jahwa's brands with its resources in the airlines, real estate, and tourism sectors.
According to a source close to the deal, Pingpu Investment has been long favored by Jahwa because its investment capability, coupled with its extensive sales network and presence in online retail, can accelerate Jahwa's expansion in the fashion industry.
Pingpu Investment plans to inject 1 billion yuan into acquiring three to four high-end brands by 2015 to extend Jahwa's product lines, and another 1 billion yuan to take the company beyond its traditional cosmetics business into jewelry, watch, footwear and clothing.
The new owner said it will do its best to get Jahwa a direct sales license by 2013, and use the 450,000-people sales team of its parent firm to aggressively launch the new sales channel.
And Yihaodian, a growing online department store in which Ping An Insurance holds a stake, will be at the forefront for Jahwa to try out its online branding and sales ideas.
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