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Fushi Copperweld’s chairman tables offer
Posted on Thursday, 04 November 2010 13:46
The chairman of Fushi Copperweld has joined up with private equity fund manager Abax Global Capital Hong Kong to table a takeover approach which values the Chinese wire and cable manufacturer at around USD 433.77 million.
Li Fu and his affiliates already own about 29.2 per cent of the Liaoning-based composite conductor products supplier and are proposing to buy the balance for USD 11.50 per share, valuing the take-private deal at about USD 307.11 million.
Considering the offer is at a 26.4 per cent premium to Fushi’s close of USD 9.10 on 2nd November, it is little wonder that investors reacted positively to news of the approach yesterday, bidding up the group’s stocks by as much as 23.7 per cent to an intra-day high of USD 11.26 before paring gains to USD 10.54 by the end of the day.
Fu and Abax will establish a vehicle to make the acquisition and are planning to finance the deal with a combination of debt and equity capital. While the consortium is in the throws of hiring a financial advisor, the target is one step ahead and has formed a special committee of independent directors to evaluate the takeover proposal.
Fushi, through its wholly owned subsidiaries, Fushi International Dalian Bimetallic Cable and Copperweld Bimetallics, claims to be the leading manufacturer of copper-clad bimetallic engineered conductor products for electrical, telecommunications, transportation, utilities and industrial applications.
With production facilities on three continents, in China, the US and England, the company distributes copper-clad steel, copper-clad aluminium wire, stranded cable, busbar and tape in over 60 countries.
In the nine months ended 30th September 2010 Fushi generated unaudited income from operations of USD 41.84 million on revenue of USD 195.06 million compared to profit of USD 24.45 million on revenue of USD 131.23 million over the same period in 2009.
Profit more than doubled year-on-year to USD 33.68 million from USD 13.86 million, showing a basic USD 0.92 profit per share against USD 0.50 in 2009.
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