Baring powers up for NASDAQ take-private bid

Yang, who already owns a 31.1 % stake, and the Hong Kong-headquartered private equity firm, offered $24 per share, representing a 20% premium over Harbin's share price on the day before the proposal. The deal is valued at $752 million.

The transaction will be financed with both debt and equity capital. Yang is to provide the equity portion of the financing, with the debt portion coming from Baring. The target company has formed a special committee of independent directors, including David Gatton, Boyd Plowman and Ching Chuen Chan, to consider the proposal, according to Harbin's statement.

Following the bid, Tripp Levy, a US-headquartered global securities law firm, has announced that it will be conducting an investigation into the proposed acquisition, to determine, among other considerations, "whether the consideration to be paid to … shareholders is grossly unfair, inadequate, and substantially below the fair or inherent value" of the company. The law firm cited some analysts' opinion of fair value for Harbin of at least $33 per share.

However, after the deal announcement, the share price of Harbin soared 18.6 % to $23.7%.  Other analysts, while confirming that the company's stock was undervalued, observed that further bids for the company were unlikely to be forthcoming, as few LBO firms have targeted these types of propositions. Yang and Baring have appointed Goldman Sachs (Asia) as financial advisor on the deal.

One PE source told AVCJ, "It is true that a number of Chinese companies, particularly SMEs that are listed in the US stock markets – where volatility is still severe and has not recovered from the GFC – intend to delist their companies and are waiting for opportunities to relist in Asian markets, like Hong Kong and Singapore." The source added that Asian companies may find more opportunity for their stocks to be followed and supported on Asian bourses.

Incorporated in July, 2003, Harbin Electric designs, develops, manufactures and supplies a range of electric motors, including linear motors, specialty micro-motors and industrial rotary motors. The company sells to a broad range of local and international customers, across industrial and resources sectors. Harbin Electric operates four manufacturing facilities in China, located in Xi'an, Weihai, Harbin, and Shanghai. The company debuted on NASDAQ in January 2007.

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• Topics
• Greater China
• North America
• Performance
• Buyouts
• Industrials
• Baring Private Equity Asia