The securities regulator has blocked a bid from US investment
bank Goldman Sachs for a stake in Fuyao Group, the country's
largest auto glass maker.
The China Securities Regulatory Commission rejected Goldman
Sachs' offer to buy a 9.98 percent stake in Fuyao, the auto glass
firm told the Shanghai exchange yesterday.
Last November Goldman Sachs agreed to buy 111.28 million shares,
or a 9.98 percent stake, in Fuyao at 8 yuan per share - far cheaper
than Fuyao's last market close of 30.5 yuan. The deal was approved
by the Ministry of Commerce in August.
Analysts said the deal price was undervalued and Chinese
investors might oppose it.
"The regulator doesn't encourage investment deals like this,"
said Zhang Xin, an analyst with Guotai Junan Securities Co Ltd in
Beijing.
Several foreign investment deals have been derailed by the stock
market's bull run, which has lifted companies' share prices far
beyond the levels that foreign buyers originally agreed to pay.
Shares in Fuyao were about 10 percent higher when the commerce
ministry approved the deal in August.
In August, the securities regulator also blocked a separate plan
by Goldman Sachs to buy a 10.7 percent stake in Midea, one of
China's top home appliance makers, for about $96 million.
The selling price was the main reason the deal was rejected,
according to analysts.
Based in Fuqing in East China's Fujian Province, Fuyao is the
world's fourth largest maker of vehicle glass. The company posted
sales of 3.67 billion yuan for the first three quarters of this
year.
The overseas market has contributed around 35 percent of the
company's sales revenue. Now it has opened offices in the United
States, Europe, Japan, South Korea and Australia.
Cao Tok-wong, president of Fuyao, earlier told China
Daily that it would open an overseas manufacturing base in the
next three to five years in a bid to further expand its business
growth on the overseas market.
Fuyao has vehicle glass manufacturing plants in Changchun,
Shanghai, Chongqing, Beijing and Guangzhou, and modern float glass
facilities in Fujian, Jilin, Inner Mongolia and Hainan.
Shares in Fuyao closed at 30.5 yuan on the Shanghai exchange
yesterday, down 0.62 percent.
(China Daily November 6, 2007)
