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CBK Digest, May 29, 2015

[Originally published on May 29, 2015, via CBK email newsletter. Sign-up via the box on the right side of the CBK website.]



Shanghai-based Baozun Inc. Debuts on Nasdaq
Shanghai-based Baozun Inc. debuted on the Nasdaq on May 21, 2015, under the ticker “BZUN.” It debuted at $10.00, under its expected price. The company was founded in 2007. Alibaba.com is a major investor. The company helps major brands, such as Philips, Nike, Microsoft and Haagen-Dazs, sell in the e-commerce market in China. The stock is trading up in the $12’s. Morgan Stanley & Co. International, Credit Suisse Securities (USA) LLC and BofA Merrill Lynch acted as joint bookrunners for the offering. Baozun is the third Chinese company to debut on the major US markets this year.


CMGE Receives “Going Private” Proposal
Hong Kong-based China Mobile Games and Entertainment Group Ltd. (Nasdaq: CMGE) received a “going private” proposal on May 18, 2015, from Orient Hongtai Beijing Investment Management Co. The offer is to acquire all the outstanding shares of the company for $21.50 per ADS. Orient Investment has separately indicated to the company that it has secured committed equity financing from certain of its affiliates and co-investors in an aggregate amount of RMB5 billion. The proposal letter did not state any information pertaining to Orient Hongtai’s or Orient Investment’s current ownership of the company’s ordinary shares or ADSs. The company is not aware through public filings or other documents that Orient Hongtai or Orient Investment may beneficially own 5 percent or more of the company’s ordinary shares. In addition, no members of the Board are affiliates of Orient Hongtai or Orient Investment. Bo Chen, signed the proposal on behalf of Orient Hongtai Beijing Investment Management Co., with the title of Director. CMGE has retained Kirkland & Ellis to act as its U.S. counsel and expects to engage a financial advisor to assist it in its review and evaluation of the proposal. CMGE Announces Receipt of a Preliminary Non-Binding Proposal to Acquire the Company

Consortium Forms for Sungy Mobile “Going Private” Proposal
-Backed by IDG Related Funds

Guangzhou-based Sungy Mobile Ltd. (Nasdaq: GOMO) that the special committee of independent directors has been informed by IDG- Accel China Growth Fund L.P., IDG-Accel China Growth Fund-A L.P., IDG Technology Venture Investment III, L.P., IDG-Accel China Investors L.P. Mr. Yuqiang Deng, chairman and CEO, and Mr. Zhi Zhu, co-COO, that IDG, Mr. Deng and Mr. Zhu entered into a consortium agreement on May 18, 2015. The company received the proposal on April 13, 2015, for $4.90 per ADS. The consortium owns approximately 42 percent of the shares. The company has engaged Duff & Phelps, as its financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP as its legal advisor to assist its Special Committee in regard to the “going private” merger offer.


Xueda Hires Counsel for “Going Private Offer”
Beijing-based Xueda Education Group’s (NYSE: XUE) “independent committee” has retained Lazard Asia (Hong Kong) Ltd. as its ifinancial advisor and Weil, Gotshal & Manges LLP as its U.S. legal counsel to assist with the committee’s review and evaluation of the preliminary non-binding proposal letter dated April 20, 2015.


Musical Chairs in the Travel Industry for eLong, Expedia, Ctrip & Priceline
Beijing-based eLong Inc. (Nasdaq: LONG) announced on May 22, 2015, that its largest shareholder, Expedia Inc., which owned 62.4 percent of the company sold its shares. The average price per share sale was $14.63 (equivalent to $29.27 per ADS). The purchasers, all based in China, include C-Travel International, Ltd. (a wholly owned subsidiary of Ctrip.com International, Ltd. (Nasdaq: CTRP)), Keystone Lodging Holdings Ltd., Plateno Group Ltd. and Luxuriant Holdings Ltd.

Shanghai-based Ctrip.com International, Ltd. (Nasdaq: CTRP) has made a strategic investment in eLong Inc. through acquiring eLong shares from certain selling shareholders, including Expedia, Inc., together with several other investors. Ctrip acquired a 37.6 percent equity stake in eLong for a total purchase price of approximately $400 million.

As well, Ctrip.com International Ltd. (Nasdaq: CTRP) announced that The Priceline Group Inc. (Nasdaq: PCLN) will invest an additional $250 million in the company. The investment will be made via a convertible bond and Ctrip has granted permission to The Priceline Group to increase its ownership in Ctrip through the acquisition of Ctrip’s American depositary shares in the open market so that, when combined with the shares issuable upon conversion of the new bond and the $500 million convertible bond issued to The Priceline Group in August 2014, The Priceline Group may hold up to 15 percent of Ctrip’s outstanding shares.


CNinsure Secures Investment
-Suffers Unusual Volatility

Late in April Guangzhou-based CNinsure Inc. (Nasdaq: CISG) announced it had secured Alltrust Insurance as a strategic investor. Alltrust bought US $42 million in ordinary stock. Not necessarily, related the company suffered unusual volatility of its stock price the third week of May. The company stated in a press release that it was not aware of any material non-public information that would account for such unusual trading activity.

ChinaNet Online Holdings Partners with Pudong Development Bank
Beijing-based ChinaNet Online Holdings, Inc. (Nasdaq: CNET) has partnered with Shanghai Pudong Development Bank Co., Ltd (SPD Bank) for a cooperation framework to launch a credit card and loan microcredit product for small enterprises and individual entrepreneurs including franchisees and chain store investors. ChinaNet will analyze its large data set of customers to help SPD Bank locate and market to target customers. Small enterprises and entrepreneurs will apply online from the convenience of home or office to receive their credit card and micro-loan, without the need to visit a bank location.

Baidu Invests in NYC’s Taboola.com
Beijing-based Baidu Inc. made a strategic investment in NYC-based Taboola.com. Taboola is a “content discovery platform” discovery platform which works with publishers to recommend other content a reader might like. Neither company detailed the nature of the strategic investment.

eHi Car Services Announces Private Placement of Common Stock
Shanghai-based eHi Car Services Ltd. (NYSE: EHIC) has issued the sale of two tranches of 22,337,924 Class A common shares of the company par value of common share at $6, or $12 per ADS. The expected raise is $134 million. Additionally, on May 22, 2015, two major shareholders of the company, Ctrip Investment Holding Ltd. and the Crawford Group, Inc., signed definitive agreements for the sale of an aggregate of 2,666,666 Common Shares.


China Yuchai Declares Dividend
Singapore-based China Yuchai International Ltd. (NYSE: CYD) will pay out a dividend of US $1.10 per share of common stock. The dividend payment will be made either wholly in cash or in new shares of CYI’s common stock at the option of the stockholder.


Skystar Receives Non-Compliance Letter
Xi’an-based Skystar Bio-Pharmaceutical Company (Nasdaq: SKBI) announced that it had received a non-compliance letter from Nasdaq due to its delay in filing Form 10-Q for the quarter ended March 31, 2015.