IPO Dealbook: China Yuhua targets $245m IPO; NYSE-listed Zhaopin Ltd discusses privatisation

Hong Kong real estate

China Yuhua is seeking to raise $245 million in a Hong Kong listing while Chinese online recruiting portal Zhaopin Ltd. is negotiating a take-private deal that will see it delist from the NYSE.

China Yuhua targets $245m fundraise in HK IPO

Henan province-based private education service operator China Yuhua Education Corporation Ltd. is nearing completion of a Hong Kong listing. This follows a $50 million anchor investment from an investment unit of Bank of Communications Ltd., according to disclosure filings.

It is largely a family-run business, with founder Li Guangyu the only shareholder. His 29-year-old daughter serves as vice-chairman of the board and executive president. Yuhua is following the trend of several Chinese private education companies who have listed in Hong Kong.

January 2017 saw Wisdom Education International Holdings, which operates in southern China, competes its IPO Hong Kong. This saw it raise net proceeds estimated at HK$796 million ($102 million).

The enterprises is targeting to raise HK$1.9 billion ($245 million) via the listing and currently operates one university and 24 schools in the K-12 education segment. The new share issuance will be completed in the coming months. The largest private school operator in terms of student numbers – 48,200 students are enrolled for the 2015/2016 school year – its claimed market share of China’s private education sector is around 0.11 per cent.

For fiscal year ended on August 31, 2016, Yuhua posted RMB781 million in revenues and RMB322 million in net profit, up 12 per cent and 31.4 per cent year-on-year, respectively. Its net profit margin posted reached 41 per cent

NYSE-listed Zhaopin discusses privatisation deal

Chinese online recruiting portal Zhaopin Ltd., which is listed on the New York Stock Exchange (NYSE), is in advanced discussions regarding a potential buyout transaction.

This is a consortium deal led by its largest shareholder, Australia-based SEEK International Investments Pty Ltd., together with investment firms Hillhouse Capital Management and FountainVest Partners.

Earlier this year, the company said it received a preliminary non-binding proposal from the consortium to acquire all outstanding shares of the company not already owned by it for US$18 in cash per American Depositary Share (ADS), or US$9 per ordinary share. As measured by average daily unique visitors, Zhaopin has over 125.2 million registered users.

In January 2016, Chinese investment firms CDH Investments and Shanghai Goliath Investment Management L.P. proposed to take Zhaopin private for US$17.50 in cash per ADS. Four months later, Sequoia Capital China teamed up with company management to bid a higher counter offer at US$17.75 in cash per ADS.

SEEK, which is an ASX-listed online job advertiser, acquired an initial 25 per cent interest in Zhaopin in 2006 and has increased its stake to approximated 74.6 per cent of voting power and 61.3 per cent of share capital as at 31 December 2016 through its vehicle SEEK International. If the deal goes through in its current firm, SEEK will retain control of Zhaopin.

According to the proposal letter, the SEEK-led consortium will partially fund the deal through available cash at Zhaopin. This may be in cash dividend form.  Zhaopin’s special committee – independent directors Peter Andrew Schloss and Alex Chit Ho – who are unaffiliated with the consortium members, have been authorised to review and consider the deal.

Chinese firms listed abroad that are seen as attractive assets that have triggered bidding wars; investors believe that good quality Chinese enterprises can be re-listed them on mainland Chinese stock exchanges at higher valuations.

Chinese high-end hospital operator Chindex International, Inc. completed a privatisation deal by TPG Capital, Shanghai Fosun Pharmaceutical (Group) Co., Ltd. and its chief executive in 2014 after a bidding war drove the purchase price to US$24 from US$19.50 apiece.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.