China’s champion gymnast Li Ning considers taking company private, sources say
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People walk past a store of Chinese sports brand Li Ning in Beijing.
PHOTO: REUTERS
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HONG KONG – Chinese billionaire and Olympic champion Li Ning is considering taking his namesake sportswear company private from the Hong Kong stock exchange, adding to a string of such potential deals in a faltering market.
The 61-year-old is considering leading a consortium to buy out Li Ning Co Ltd, which had a market capitalisation of HK$52.85 billion (S$9 billion) as of March 11, said the people who have knowledge of the matter.
Li was regarded as China’s “gymnastics prince” after winning six of the seven men’s gold medals at the 1982 World Cup, and went on to win six medals at the 1984 Los Angeles Olympic Games.
He founded Li Ning Co a few years after retiring from his decorated gymnastics career in 1988. Along with his family, he owns more than 10 per cent of the company, its 2023 interim report showed.
A number of global and regional private equity firms, including TPG, PAG and Hillhouse Investment, have been tapped to see if they are interested in joining as an investor, two people said.
The discussions to take Li Ning Co private are in the early stages and details have not been finalised, added the sources. Li Ning made its Hong Kong debut in 2004.
The company's shares jumped as much as 20 per cent to HK$24.55 following the Reuters report on March 12, the highest since November.
Beijing-headquartered Li Ning Co said in a response to Reuters that it had “not received any information regarding this matter as of now”.
Li did not immediately respond to a request for comment sent via the company, while TPG, PAG and Hillhouse also declined to comment.
Stock markets in Hong Kong and mainland China have tanked over the past year amid China’s economic slowdown, a lack of strong stimulus policies and geopolitical tensions.
Li feels his company is undervalued in Hong Kong and would target a hefty premium over its current share price in a potential buyout, two of the sources said.
He did not have an imminent plan to relist his company on the mainland, one of them added.
Hong Kong-listed firms have been involved in US$4 billion (S$5.3 billion) worth of take-private deals so far in 2024, versus US$1.2 billion for all of 2023, Dealogic data showed.
Buyers often cited undervalued shares as a reason for the deals.
A number of Hong Kong-listed companies, including French skincare company L'Occitane and American luggage maker Samsonite, have also recently engaged with advisers and investors about potential take-privates, separate sources said.
Bankers, however, cautioned take-private deals would remain challenging for management or private equity investors, as financing is costly in the current interest rates environment and fair valuation hard to achieve without a stabilised market. REUTERS
