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Takeover offer is made for China New Borun
Posted on Thursday, 11 January 2018 07:19
The majority shareholder of China New Borun has teamed up with the chief executive of the Chinese corn-based edible alcohol producer and distributor to table a going-private offer worth USD 42.96 million.
Jinmiao Wang and British Virgin Islands-based King River Holding, which is controlled and owned by Wang’s mother Shan Junqin, are proposing to acquire the remaining stake not already held for USD 1.67 apiece.
The offer is 32.6 per cent higher than the average closing price of the company’s American depository shares over the last 30 trading days up to and including 9th January 2018.
Funding would come in the form of debt and equity capital, which come from a rollover from consortium members and cash contributions and, possibly, third party sponsors.
Debt financing is expected to be provided by loans from financial institutions or outside investors.
Cayman Islands-incorporated China New Borun’s predecessor, Shandong Borun, had been controlled by Wang and his father, Peiren Wang, together with Shan Junqin, since its incorporation in December 2000.
This entity was reorganised between September and December 2008 for the purpose of facilitating investments into Shandong Borun by unrelated off-shore, non-Chinese private equity investors.
China New Borun, which is now 55.6 per cent held by King River, claims to be a leading maker and distributor of corn-based edible alcohol in the People’s Republic, based on tons of edible alcohol produced.
The products are sold as an ingredient to manufacturers of baijiu, a grain-based alcoholic beverage generally made from corn, wheat or barley, which is clear in colour with an alcohol content ranging from 18.0 per cent to 68.0 per cent.
In China, this spirit is sold in retail stores, bars, banquet halls, restaurants and other locations.
Revenue totalled USD 307.44 million in the 12 months ended 31st December 2016, while net profit amounted to USD 9.18 million.
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