Sina Hong Kong stock news on August 1st, Li & Fung announced yesterday that it will accept JD.com (9618) to make a strategic investment of US $100 million (equivalent to HK $780 million) per share by subscribing for new shares to further develop its digital supply chain. The Feng family will continue to maintain control of Li & Fung by holding 60 per cent of the voting shares.
In the face of the impact of the digitization of the industry, the continuing tension in global trade relations, coupled with the huge impact of the COVID-19 epidemic, the global supply chain has become more and more complex. Li & Fung said it has been committed to creating a future supply chain, while as a leading mainland ecommerce company, JD.com is committed to becoming a 'supply chain-centric technology and service company', which coincides with Li & Fung's goal. Therefore, Li & Fung will make full use of its global supply network and digital supply chain to further expand its business by working with JD.com on its own brands in the mainland market.
Feng Yujun, chief executive of Li & Fung, said the company's goal is to create a future supply chain and improve the lives of billions of people in the global supply chain, which is particularly important in such a volatile world. JD.com 's stake will play a key role in further strengthening Li & Fung.
On May 27th, Li & Fung (00494) announced that the company would withdraw its listing from the Stock Exchange at 4 pm today, successfully completing the privatization process. Cheques payable to the intending shareholders will be sent on or before June 1 this year. At this point, Li & Fung ended nearly 28 years of listing status.
The Group said that after becoming a private company, Li & Fung would be jointly owned and managed by the Fung family and GLP. The Feng family will maintain Li & Fung's controlling shareholder status and hold 60 per cent of the scheduled shares. GLP holds the remaining 40% of the scheduled shares and 100% of the non-voting shares, that is, 67.67% of the effective economic ownership. Feng Yujun, chief executive of Li & Fung Group, said that the group will focus on achieving a fundamental transformation of the business, and the cooperation between Li & Fung and GLP will bring significant benefits to the business.
After a large number of minority shareholders learned that the privatization bill was passed at the court meeting, they directly denounced that the privatization price was too low and that it was a "shoddy price". As a result, the minority shareholders who had invested for a long time "lost all their money" and were "robber-like behavior".
Li & Fung is one of the oldest export trading firms in Hong Kong. It was founded in 1906 by Fung Pak-liao, the great-grandfather of Fung Yujun. In its heyday, the Fung family owned four listed companies, namely Li & Fung,Leia retail, profit and distribution,RibbonHolding. On May 27, Li & Fung was privatized and delisted, leaving only one company that was split and listed in July 2014.Libiao brand".
Li & Fung was first listed on the Hong Kong Stock Exchange in 1973, privatized in 1988 and re-listed in 1992. As an established blue chip, Li & Fung shares closed at HK $25.98 per share and its market capitalization climbed to HK $200 billion, but was downplayed by UBS in 2011 and was removed from the blue chip status in 2017. Li & Fung shares were trading at HK $1.240 per share as of the close of trading on May 15, with a total market capitalization of HK $10.588 billion.
Li & Fung was privatized at HK $1.25 per share, which is slightly higher than the closing price on the 15th, but has been discounted by 95% from its all-time high.
Xu Wenchang, a Sina columnist who participated in voting in support of privatization, believes that Li & Fung has lost to technology digital and fast fashion, coupled with the impact of the epidemic on the retail industry, and the restructuring is also uncertain. Privatization delisting to investors is reasonable: "I understand that Li & Fung's share price has fallen more than 90% from its peak, and the management can no longer absolve itself of the blame, but the general trend such as quick thinking and Nokia is no longer, if investors really suffer big losses. Silchester, the shareholder of the fund, who is often active against management, will not be opposed. " Xu Wenchang suggested that investors should take advantage of the market conditions to find other opportunities.
