Shanghai Jahwa:Jahwa parent co.to buy 20%stake of Jahwa listco at RMB38/share

Shanghai Jahwa (Jahwa) announced after market close today that ShanghaiJahwa Group, the parent company of Jahwa listco, plans to buy up to 20% ofJahwa's shares at RMB38/share. Jahwa’s shares will resume trading from 13 Oct.

    Details are as below:Buyer: Shanghai Jahwa Group (parent company of Jahwa listco).

    Seller: All the shareholders excluding all the entities under Ping An (ChinaPingAn Life Insurance, Shanghai Huisheng Industrial Company, and Shanghai Tai FuXiang Er Equity Investment Fund Partnership).

    Offer price: RMB38/share (+18% vs the closing price, RMB32.15/share beforesuspension)Period: 30 days after the announcement. The subscription will only start after itannounces a full circular.

    No. of shares: Involves 135m shares (20% of total issued shares).

    Amount: RMB5.1bn, 20% of the amount (RMB1bn) to be deposited as guarantee.

    Capital funding: from Ping Pu Investment, the parent company of ShanghaiJahwa Group under Ping An.

    Rationale: 1) The share acquisition is a way to strengthen the parent company’scontrol on the listed company. 2) Premium in offer price reflects Ping An’sconfidence in the China HBC industry and Jahwa’s long-term perspective; 3) Thistender offer is a partial tender offer; i.e., the parent company intends to maintainJahwa’s listing status after completion.

    Future plan: Apart from this tender offer, Shanghai Jahwa Group does not havea plan to continue increasing the stake of Jahwa listco in the next 12 months.