The Chinese Academy of Sciences Holding Company - an investment arm of the Chinese government - is looking to sell half its majority stake in PC and server maker Lenovo. CAS Holdings owns 65 per cent of Legend - the holding company behind Lenovo, but wants to flog a 29 per cent stake in the firm if it can find a suitable buyer. …
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Posted Wednesday 12th August 2009 00:07 GMT
"But any would-be bidder will have to show it has capital of RMB4bn (£355.70m), average annual net profit over the last three years of RMB800m (£71.1m) and total assets of RMB35bn (£3.11bn)"
In this instance or in general, why would the selling company care how much money the buyer has or how much profit they earn?
Paris, cus I'm just as learned ant talented as her.
Posted Wednesday 12th August 2009 17:15 GMT
Because they're not selling out completely, just reducing their stake, and they want the new majority owner to be capable of making a profit, which they will get a cut of (or alternatively, they want the new owner to increase the value of the business so they can sell more of it later at a higher price).
Posted Wednesday 12th August 2009 17:15 GMT
Probably because they will continue to hold a large portion of shares and if a fly-by-nighter comes along and goes titsup in 6 months then china.gov will lose the remainder of their investment.
Then again, I don't doubt that were such a scenario to play out the Chinese Gov would not be above simply taking Lenovo back using whatever their equivalent of eminent domain is so maybe I need a bit of edjukating too.
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