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Move to sell stake smells of revamp plan
By Pan Xiaoyi |
December 10, 2010, Friday
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Print Edition
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SHANGHAI Jahwa Group, a government-backed cosmetics maker, may sell its stake in its listed arm to Ping An Insurance as part of the group's restructuring plan.
Jahwa Group, which owns Liushen and Herborist brands, is in talks with Ping An to sell its entire 38.98 percent stake in a deal worth 6.58 billion yuan (US$989 million), the biggest ever in China's cosmetics industry, China Business News reported, citing an unidentified source close to the Shanghai unit of the country's state asset watchdog.
In a filing to the Shanghai Stock Exchange on Tuesday, Shanghai Jahwa United Co, the listed unit, has been suspended from trading on Monday because its state-owned parent group is planning a restructuring.
The shares were priced at 40 yuan each compared with 37 yuan before shares were halted from trading.
The company will make an announcement today on whether "important matters" are feasible, the filing said, without elaborating.
But CBN said that the talks between Jahwa Group and Ping An could collapse. Jahwa Group and Ping An, China's second largest insurer which is 48 percent owned by HSBC Holdings Plc, were not available for comment.
The restructuring could improve the company's brand management and operating capability, China International Capital Corp wrote in a note.
While domestic brands including Dabao, Mininurse and Tjoy have been taken over by overseas companies, Ge Wenyao, chairman of Jahwa Group, has said Jahwa will not be sold to foreign firms.
Jahwa Group, which owns Liushen and Herborist brands, is in talks with Ping An to sell its entire 38.98 percent stake in a deal worth 6.58 billion yuan (US$989 million), the biggest ever in China's cosmetics industry, China Business News reported, citing an unidentified source close to the Shanghai unit of the country's state asset watchdog.
In a filing to the Shanghai Stock Exchange on Tuesday, Shanghai Jahwa United Co, the listed unit, has been suspended from trading on Monday because its state-owned parent group is planning a restructuring.
The shares were priced at 40 yuan each compared with 37 yuan before shares were halted from trading.
The company will make an announcement today on whether "important matters" are feasible, the filing said, without elaborating.
But CBN said that the talks between Jahwa Group and Ping An could collapse. Jahwa Group and Ping An, China's second largest insurer which is 48 percent owned by HSBC Holdings Plc, were not available for comment.
The restructuring could improve the company's brand management and operating capability, China International Capital Corp wrote in a note.
While domestic brands including Dabao, Mininurse and Tjoy have been taken over by overseas companies, Ge Wenyao, chairman of Jahwa Group, has said Jahwa will not be sold to foreign firms.
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