Temasek, Hopu Buy $213m Stake In Chinese Dairy Maker

A group of investors led by Singapore’s Temasek Holdings bought a $213 million stake in Yashili International Holdings Ltd, sending shares of the milk powder producer soaring last week after its parent sold down stock to meet Hong Kong listing requirements.
Singapore state investor Temasek, through one of its Mauritius subsidiaries, China-focused private equity firm Hopu and three individual investors agreed to buy 471.13 million shares of Yashili from its parent China Mengniu Dairy Co Ltd for HK$3.50 each, putting the total deal at HK$1.65 billion ($213 million), the dairy companies said in a securities filing on Monday last week.
Yashili gained 13 percent to HK$4.08 in late-morning in Hong Kong and traded at a record high of HK$4.45 as it resumed trading after a nearly three-month halt. China Mengniu climbed 2.9 percent, compared with a flat performance for the benchmark Hang Seng index.
Temasek bought 47 percent of the Yashili shares, with Hopu taking 38 percent of the shares. The three individual investors bought the remaining 15 percent through British Virgin Islands holding companies, according to the filing, which did not name them.
Shares of Chinese dairy companies have jumped in recent months on expectations of consolidation in the sector and booming demand in the country, where sales of dairy products are expected to nearly double through 2017 from 2012 to about $89 billion, according to estimates by business consulting firm Frost & Sullivan.
Mengniu offered $1.6 billion in June for all of Yashili, but it received offers for 89.82 percent of Yashili’s stock. That fell just short of a 90 percent threshold that would have enabled Mengniu to make a “compulsory acquisition” of the remaining shares and delist Yashili from the exchange.
The takeover got commitments from Yashili’s two largest shareholders, the Zhang family and private equity firm Carlyle Group, which owned a combined 75 percent stake in the infant formula maker.
After the buyout offer closed in early August, Mengniu had to sell down its stake in Yashili to ensure the still-listed company met Hong Kong’s public float requirements.
Yashili shares had been suspended since August 14 after the company applied for a three-month waiver to comply with the minimum public float of 23.42 percent in its case.                           Reuters