CMC Holdings to buy 30% of Hong Kong-listed Meike

According to a filing, Allan Yap, Meike's executive director and its largest shareholder, will sell his entire holding of 350 million ordinary shares to CMC Holdings for an undisclosed sum. Meike's stock closed at HK$0.82 on January 28, the day the agreement was signed.

The potential investment was first announced in July last year. A group of investors - including Tencent Holdings, Li, and Charles Chan, chairman of Hong Kong Television Broadcasts (TVB) - agreed to invest HK$3.96 billion ($510 million) in Meike via a combination of ordinary shares and convertible shares subcription. 

However, the Hong Kong Stock Exchange's listing department ruled in October that the proposed acquisition constituted a reverse takeover that would lead to changes in the principal business of the listed company. As such, Meike had to go through a new listing process before the trading suspension could be lifted. The investor group withdrew its proposal, although Meike said Yap would explore other ways of selling equity.

Based in Fujian, the listed company manufactures and distributes leisure sportswear, including footwear and apparel, under the Meike brand. It revenue decreased to RMB163 million ($25 million) in 2014 from RMB230 million in 2013. Net losses narrowed to RMB165 million in 2014 from RMB254 million in 2013.

The buyers have collaborated on other transactions, with CMC Capital Partners investing in TVB last April. Several months later, Li announced the establishment of CMC Holdings, with support from Oriza Holdings, Tencent and Alibaba Group. They jointly invested RMB10 billion in the platform.

While short-term financial-driven investments are managed by CMC Capital Partners, a number of long-term strategic investments will be structured under the CMC Holdings umbrella.

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• Topics
• Greater China
• Consumer
• PIPEs
• China
• Consumer
• PIPE
• China Media Capital