Source: Securities Times
Author: Zhuo Yong
On November 6, Baishi Group, a provider of smart supply chain solutions and logistics services in China, issued an announcement stating that the board of directors has received an initial non-binding offer from a buyer consortium composed of Alibaba, Cainiao Network, and company founder Zhou Shaoning to acquire all issued common shares.
Based on this proposal, the buyers' consortium plans to buy at $0.144 per common share or $2.88 per ADS in cash$BEST Inc (BEST.US)$All issued common shares, including Class A common stock represented by ADS. Based on the current total share capital of Baishi Group of 1988 million shares, the current privatization price may reach 57.2544 million US dollars, which is approximately over 400 million yuan.
It is worth noting that the consortium members who initiated the takeover offer this time$Cainiao Smart Logistics Network Limited (810537.HK)$A listing prospectus has recently been submitted to the Hong Kong stock market. A takeover offer has been put forward at this point in time. The outside world cannot help but wonder if Baishi Group's express delivery, international business, and supply chain business will be integrated into the Cainiao system, and what impact will it have on Cainiao's Hong Kong stock listing? These issues have all attracted market attention.
It may spend 400 million dollars on acquisitions. Baishi International's business has improved
According to Baishi Group's official website, Baishi Group was founded in 2007 and is a leading provider of smart supply chain solutions and logistics services in China and Southeast Asia. It integrates express transportation, supply chain management, international logistics and other business segments to establish a “door-to-door” B2B2C one-stop service. Up to now, Baishi has established a nationwide logistics distribution network and is operating in 7 overseas countries, including the United States, Thailand, Vietnam, and Malaysia. In 2017, Baishi Group was listed on the NYSE.
Regarding this privatization proposal, Baishi Group announced that the company's board of directors has set up a special committee composed of three independent directors to evaluate and review the proposal and potential transactions. The three independent directors are Wenbiao Li (Wenbiao Li), Ying Wu (Ying Wu), and Klaus Anker Petersen; Wu Ying is the chairman of the special committee.
Baishi's board of directors also reminds the company's shareholders and others considering trading the company's securities that the company has not made any decisions on the proposal or proposed transaction, and there is no guarantee that the buyer will make a final formal takeover offer, nor can it guarantee that any future transactions will be reached.
It is worth noting that Baishi Group's domestic express delivery business was acquired by Jitu Express as early as October 2021 for about 6.8 billion yuan. Zhou Shaoning, founder, chairman and CEO of Baishi Group, said that after the acquisition is completed, Baishi will concentrate its energy and resources to further promote the deep integration of supply chain, express transportation and international business, accelerate business development, and create an international integrated intelligent supply chain service.
This means that Baishi Group has left the competitive domestic price battlefield and focused its development on supply chain, news and international cross-border business. As can be seen from recent financial reports, Baishi's strategic shift is beginning to bear fruit.
According to Baishi Group's financial report, the company's revenue for the first half of the year was RMB 3,853 million, with a net loss of RMB 417 million, compared with a net loss of RMB 718 million for the same period last year. In the second quarter of this year, Baishi Group's total revenue was 2.14 billion yuan, and gross margin increased by 8.8 percentage points over the same period last year. Among them, Baishi Express achieved non-GAAP (non-GAAP) profits, and Baishi Supply Chain was profitable for two consecutive quarters. Fan Qianyi, chief financial officer of Baishi Group, also said at the time that Baishi Group's financial indicators improved markedly in the second quarter, with revenue increasing 10.7% year on year. It is expected that in the second half of this year, the express shipping and supply chain businesses will continue to be profitable and achieve positive operating cash flow throughout the year.
Will it be incorporated as a rookie? A return to A shares or Hong Kong stocks is not ruled out
In addition to Zhou Shaoning, founder of Baishi Group, the buyer consortium of this acquisition proposal also includes$BABA-SW (09988.HK)$/$Alibaba (BABA.US)$and Cainiao Network.
According to Baishi Group's 2022 annual report and available public information, Baishi Group founder Zhou Shaoning has been the company's chairman and CEO since the company was founded, while company directors Wan Lin and Hu Xiao are from Cainiao Network and Alibaba respectively. The former is the CEO of Cainiao Group, while the latter has served as director and managing director of Alibaba's strategic investment department.
According to Baishi Group's previous IPO documents, Alibaba, the largest shareholder of Baishi Group before the IPO, held 23.4% of the shares (and 70% of Baishi Express); the second largest shareholder was Baishi Group Chairman and CEO Zhou Shaoning, holding 14.7%; CR Entities, the third largest shareholder, held 11.3%; the fourth largest shareholder, IDG, held 6.2%; and Cainiao Network held 5.6%.
Cainiao officially submitted a listing application to the Hong Kong Stock Exchange on September 26 this year, becoming the first business group to officially enter the IPO (initial public offering) process after Alibaba's “1+6+N”. It is worth noting that Cainiao has emphasized its layout in cross-border logistics many times in its prospectus, and in fiscal year 2023, its international logistics already accounted for 47.4% of Cainiao's annual fiscal revenue, surpassing domestic logistics (46.2%). This is easy to understand. Cainiao wants to further strengthen its overseas business strength by acquiring Baishi Group's supply chain and international business.
Express delivery expert Zhao Xiaomin analyzed to reporters that judging from Baishi Group's current performance in the capital market, the market capitalization has been sluggish for a long time. After many stock exchanges, and there is no need to continue listing, privatization is also a result anticipated by the market. What is more critical is whether Baishi Express, international business, and supply chain business will be merged into the Cainiao system if Baishi Group can complete privatization this time is the focus of market attention.
Zhao Xiaomin said that for Cainiao, if Baishi Group's business mentioned above can be incorporated into Cainiao, Cainiao's express and international business segments will be further effectively complemented. However, it is important to note that after all, part of Baishi's business is still losing money; it is unknown how Cainiao will consider and handle these losses.
He further analyzed that if Baishi Group completes privatization, then it will be delisted and delisted, and the possibility that it will re-list A-shares or Hong Kong stocks is not ruled out.
editor/tolk