Temasek, Hopu participate in $213m China dairy investment

According to a regulatory filing, the investors will acquire 471.1 million shares in Yashili at HK$3.50 apiece. Temasek-controlled Dunearn Investments is paying HK$770.8 million for a 6.19% stake, while Hopu-owned VITEL Group will take a 4.98% interest for HK$620.9 million. The three other investors - Diverse Profits, Lead Rich International and Wincon Capital Investment - will own 2.07% between them.

Once the transaction is completed, Mengniu will hold a 76.58% stake in Yashili, down from 89.82%. It will use the proceeds to pay down debt tied to its acquisition of Yashili.

Mengniu initially bought a 75.3% stake in the company from majority shareholder the Zhang family and The Carlyle Group in June. The private equity firm received approximately HK$3 billion for its 24% holding. Carlyle bought 17.3% of Yashili in September 2009 for $95.15 million and increased its stake when the company went public in Hong Kong in 2010.

This was one of several private equity investments in China's dairy industry in the wake of the 2008 melamine scandal where tainted milk products cost the lives of six infants. KKR and CDH Investments acquired a 45% stake in China Modern Dairy in 2008, took the company public in Hong Kong, and then made partial exits to Mengniu in June.

Hopu invested in Mengniu itself in 2009, buying a 20% stake alongside state-owned grain trader COFCO Group for HK$6.12 billion. The commitment came from Hopu Master Fund I, a $2.5 billion vehicle established that counts Temasek among its LPs.

Hopu was set up by former Goldman Sachs bankers Fang Fenglei and Richard Ong but it disbanded in late 2010 amid reports that the two principals could not get along. While Ong has since founded RRJ Capital, Fang is sticking with the Hopu brand. It was reported in May that he had already received $1 billion in commitments for Hopu Master Fund II, which is looking to raise at least $2 billion.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• PIPEs
• Greater China
• Consumer
• PIPE
• China
• Consumer
• Hopu Investment Management
• Temasek Holdings