Chinese sportswear brand Li Ning reportedly considers going private

Chinese sports brand Li Ning Company (李寧) is reportedly considering going private from the Hong Kong Stock Exchange (HKEX).

According to Reuters, sources familiar with the matter said that Li Ning, founder of Li Ning Company, is considering leading a consortium to buy out the company, which had a market capitalisation of HK$52.85 billion as of Monday (11 March 2024).

Furthermore, Li Ning has invited several global and regional private equity firms, including TPG, PAG and Hillhouse Investment (高瓴投資), to explore the possibility of becoming investors in the company, said the report.

This comes as Li Ning believes that his company is undervalued in the Hong Kong market, added the report. In the potential buyout, he will aim for a significant premium over the current share price of the company.

Meanwhile, discussions regarding the privatisation of Li Ning Company are still in the preliminary stages, and the specific details have not been concluded. The information regarding these discussions is also being kept confidential. 

Following Reuters’ news, Li Ning's stock experienced a substantial increase yesterday (12 March 2024), with its price surging by as much as 20%.

According to a filing after Tuesday's (12 March 2024) market close that was seen by MARKETING-INTERACTIVE on HKEX, Li Ning Company said it is not aware of any reasons for the company's "recent unusual movements" in price and trading volume or any information that must be disclosed to avoid a false market.

The shareholding disclosures data from HKEX also showed that, as of 23 January 2024, Li Ning owns 10.74% of the shares in the company.

MARKETING-INTERACTIVE has reached out to Li Ning for a statement. 

Back in December last year, Li Ning said in a HKEX filing that it would buy a Hong Kong commercial and retail property from Henderson Land for HK$2.21 billion as its Hong Kong headquarters.

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