BRIEF: Lifestyle China raises privatization offer price

Department store operator and retailer Lifestyle China Group Ltd. (2136), announced on Thursday that its chairman and major shareholder Lau Luen Hung raised his offer to privatize the company by 7.3% from a previous HK$0.913 per share to HK$0.98, and stressed that the new offer price was final.

Lau originally proposed privatizing Lifestyle China last month, with the original price of HK$0.913 representing a 21.7% premium over the stock’s last trading price of HK$0.75 before the shares were suspended. He and others behind the bid collectively hold nearly 75% of the company’s shares, meaning the acquisition of shares from other minority shareholders would have cost nearly HK$340 million ($44 million).

As of the end of June last year, Lifestyle China’s net asset value per share was HK$6.981. Thus, even after the raised buyout offer, the new amount was still 86% lower than the company’s net asset value.

Lau’s decision to raise the offer price was expected, previously driving the stock price higher than the original privatization offer. But the newly raised price was only the same as Thursday’s closing price, which was lower than market expectation. As a result, Lifestyle China opened down sharply by 15.3% at HK$0.83.

By Lau Chi Hang

To subscribe to Bamboo Works weekly free newsletter, click  here