A window on management-led buyouts by U.S.-listed Chinese healthcare companies has apparently narrowed as Shenzhen-based Mindray Medical ($MR) saw executives cut an offer price to $27 from $30.
The revised offer, a 10% drop from the original June price, comes with a litany of issues cited from weaker financial performance to global financial market instability and a 4% drop in the yuan/dollar parity rate set by the People's Bank of China that makes U.S. dollar acquisition funding more expensive, according to a press release.
Whether Mindray will have a knock-on effect remains to be seen with a test case of sorts up this month. China's iKang Healthcare ($KANG) wants to go private in a management-led $1.1 billion offer that would see it delist from the U.S.
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| iKang CEO Ligang Zhang |
The company has been on the Nasdaq just shy of two years with a group led by founder, chairman and CEO Ligang Zhang ready to take the company private at $17.80 per American Depositary Share (ADS), about 10% above the price at the time of the offer on Aug. 31 and a nearly one-third more than the initial public offering price of $14 per ADS.
It does appear though that China's top CRO WuXi PharmaTech ($WX) will complete a $3.3 billion buyout and delist from the U.S. market.
The deal, pending a nod from shareholders, sees an all-cash transaction at $46 a share and a new parent company led by CEO Ge Li and China-focused fund Ally Bridge Group as well as Boyu Capital, Temasek Life Sciences, Hillhouse Capital, Ping An Insurance and other company executives.
China's Shanghai Composite has been on a steady losing streak since July, though it's coming down from levels that saw the benchmark up more than 100% at that point. For Chinese healthcare companies, a more fluid choice remains Hong Kong, which saw 3SBio in June raise $710 million in an initial public offering two years after it left the Nasdaq in 2013 and went private under a $370 million deal done by a consortium led by CEO Jing Lou and investment firm Citic Private Equity.
- here's the release