Robotics company Ubtech Robotics Corp. Ltd. (9880.HK) said it will acquire up to 43% of auto parts and garden machinery maker Zhejiang Fenglong Electric Co. Ltd. (002931.SZ) for as much as 1.67 billion yuan ($242 million) in a two-part deal.
In the deal’s first stage, Ubtech would acquire about 65.5 million of Fenglong’s Shenzhen-listed shares from Chengfeng Investment at a price of 17.72 yuan per share, or about 1.16 billion yuan, according to Ubtech’s announcement. After that, Ubtech would offer to buy another 28.5 million of Fenglong’s shares, also at a price of 17.72 yuan per share and equal to 13% of its total share capital, for 505 million yuan.
The sale price represents a 10% discount to Fenglong’s closing price on Dec. 17, the last trading day before Fenglong separately announced the deal to the Shenzhen Stock Exchange. Fenglong reported 373 million yuan in revenue during the first nine months of last year and a net profit of 25.1 million yuan for that period.
Ubtech’s stock was up 6.2% at HK$146.60 on Friday afternoon, the first trading day after the Monday announcement. The stock is up more than 50% over the last 52 weeks. Fenglong’s stock has risen fivefold since Dec. 17 and closed at 89.85 yuan on Feb. 13, the last trading day before the Lunar New Year holiday in China.
By Doug Young
To subscribe to Bamboo Works weekly free newsletter, click here
