CICC, Chinese strategic launch competing offer for Sinovac
China-based Sinovac Biotech, which earlier this week became the target of a take-private bid from its chairman and SAIF Partners, has received a competing offer from a consortium that includes China International Capital Corporation (CICC).
Sinovac said in a filing that the new buyer group includes Beijing Sinobioway Group, its A-share listed subsidiary Shandong Sinobioway Biomedicine, PKU V-Ming Investment - an investment vehicle held by Beijing Sinobioway and another Chinese company - and CICC Qianhai Development Fund Management. Two Hong Kong-based private equity investment firms, Heng Feng Investments and Fuerde Global Investment, also participated.
The CICC vehicle was set up by CICC in conjunction with Shenzhen Qianhai Financial Holdings and Industrial and Commercial Bank of China (ICBC).
They are willing to pay $7.00 per share, valuing Sinovac at approximately $390 million. This compares to the $345 million offer tabled by Weidong Yin, the company's chairman and CEO, and SAIF. SAIF holds an 18.9% stake in the company through its fourth fund - which closed at $1.3 billion in 2010 - while Yin has 10.8%. Other institutional shareholders include Wellington Management, Globe Capital, and Orbimed Advisors.
Sinovac was founded as Tangshan Yian in 1993 and listed in the US through a reverse merger in 2003. Seven years later it moved to NASDAQ, raising $61.8 million. The company produces a range of vaccines used to treat infectious diseases such as hepatitis, influenza and mumps. Most of its sales come from three drugs, two of which target hepatitis and the third influenza.
In 2009, Sinovac was the first company globally to receive approval for a swine flu vaccine, which it supplies to the Chinese government's vaccination campaign and stockpiling program. It is also the only supplier of an avian flu vaccine to the government stockpiling program.
Revenue came to $63.1 million in 2014, down from $72.5 million the previous year. Sinovac has posted net losses in four out of the past five years, including 2014.
This is not the only China take-private in which a management-led bid has been challenged by a rival strategic player. IKang Healthcare Group is currently subject to competing PE-backed privatization proposals, one from management and another involving Meinian Onehealth.
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