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In detail, the TCM manufacturer will sell 50 million shares to the Shenzhen-based life insurer, which is the second biggest life insurer in the country, at CNY 27.87 per share, totally raising CNY 1.3935 billion. After the deal, Ping An Life will have a 9.36% stake in Yunnan Baiyao, thus becoming the latter's third largest shareholders well after Yunnan Medicament Group and Hongta Group.
The proceeds from the deal will be partially pumped into the removal of Yunnan Baiyao plant and partially into the company's arm Yunnan Pharmaceutical Co., Ltd.
Shenzhen-listed Yunnan Baiyao's share placement plan ever attracted many intended investors. But as a famous TCM manufacturer with two national-class confidential prescriptions, the company cannot sell shares to foreign investors. In addition, the company this time wanted to collect more than CNY 1 billion, which seems too much for some interested investors.
It merely took two weeks for Ping An Life and Yunnan Baiyao to complete the deal. On July 28, the life insurer formally started talks with Yunnan Baiyao. In fact, Ping An Life has always been keeping an eye on Yunnan Baiyao, people close to the deal disclosed.
As for the purpose of this time's investment, the life insurer was previously said to covet the wide marketing network of a drugstore company under Yunnan Pharmaceutical. Ping An life was guessed to forge the company into a health and beauty products retailer like Watsons. Also, there was another story that Ping An Life intended to harvest profits from the removal of Yunnan Baiyao, which buys its new land for production at only CNY 20,000 per mu (1 mu = 667 square meters), 20% of the normal CNY 100,000.
But people close to Ping An Life denied such stories, saying that life insurer is just attracted by Yunnan Baiyao's bright outlook and its good self-operation ability.
Ping An, the parent of Ping An Life, has accelerated its direct investments since the second half of 2007. It directly invested CNY 6 billion into the Beijing-Shanghai express railway project, accounting for more than 40% of total CNY 16 billion capital jointly made by several local insurers.
(USD 1 = CNY 6.86)
From www.nanfangdaily.com.cn, Page 1, Friday, August 15, 2008 info@SinoCast.com
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