China Biologic Products receives competing take-private offer
US-listed China Biologic Products has received a buyout offer worth $3.9 billion from a consortium including former CEO David Gao and CDH Investments. It follows a $3.6 billion bid last month by CITIC Capital.
The consortium, which also includes healthcare-focused investor GL Capital and a private equity unit of the Bank of China, is willing to pay $118 per ordinary share in cash. This compares to a $110-per-share offer by CITIC. The stock jumped 12% following the announcement and was trading at $100 as of midday August 21.
“It is our belief that in order to deliver on our commitments of growth, we will need and seek continued support from the company’s current management team,” the consortium said in a filing. “To that end, we would like the management team to remain meaningful shareholders in the business and we would plan, at the appropriate time, to engage in relevant discussions with them.”
Gao served as chairman and CEO from 2012 to July 2018 and controls a 1.3% stake. CITIC Capital owns 5.1%, while the largest individual shareholder is Hong Kong-listed medical device manufacturer PW Medtech with 16.7%. China Biologic bought an 80% stake in TianXinFu, a subsidiary of PW Medtech, in January through an all-share deal.
Founded in 2002, China Biologic produces plasma-based biopharmaceuticals for the prevention and treatment of life-threatening diseases and immune-deficiency related diseases. Most of the revenue comes from human albumin, which is used to treat conditions such as blood loss trauma, and intravenous immunoglobulin. Products are distributed to about 600 hospitals and clinics across China.
The company listed in the US in 2009 and generated $370.4 million in revenue in 2017, up from $341.2 million the prior year. Over the same period, net profit fell from $104.8 million to $67.9 million. Previous investors include Warburg Pincus, which received $308 million from a partial exit amounting to about 2.8 million shares, or a 10.4% stake in 2016.
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