A Bain negotiation team, headed by Hong Kong-based managing director Jonathan Zhu, began exclusive talks with Gome's management team led by Chairman Chen Xiao this Monday, aiming to buy 20 percent of Gome's stake, reported Shanghai Securities News Thursday. No legally binding contract has been signed yet.
Bain aims to buy a 20 percent stake of Gome worth about HK$3 billion (US$387 million) based on the latter's last closing price of HK$1.12 per share. In the battle for this deal, Bain has competed with other potential investors including KKR, Fortress, Best Buy, and Fosun Group.
Insiders revealed that the reason for Bain's entering into exclusive talks is that it has put forward a proposal to the US government, pledging to "guarantee the holding position of Huang Family". Huang Guangyu, Gome founder and ex-chairman, is being investigated by Chinese police for alleged financial misconduct.
On June 30, Gome will hold its general meeting of shareholders at which Vice Chairman Sun Yiding, once an intimate of Huang Guangyu, is likely to be elected as an executive director. There would then be three allies of Huang among the four executive directors.
For more details, please read the full Chinese coverage at:
http://paper.cnstock.com/html/2009-06/04/content_70942740.htm
(China.org.cn by Fan Junmei June 4, 2009)
