China's Changhong to buy 30% of Huayi for $32 mln
SHANGHAI, Dec 25 (Reuters) - Sichuan Changhong Electric Co (600839.SS), a Chinese home appliance maker partly owned by Microsoft Corp (MSFT.O), said on Tuesday it will buy a controlling stake in China's biggest compressor manufacturer for 234 million yuan ($31.8 million).
Changhong won an auction of 97.1 million shares, or 29.92 percent, of Huayi Compressor Co 000404.SZ with an offer of 2.41 yuan per share, a 77 percent discount to Huayi's previous share price of 10.42 yuan, Changhong said in a statement to the Shanghai stock exchange. Changhong's shares rose 4.38 percent to 8.82 yuan on Tuesday morning, compared with a 0.23 percent drop in Shanghai's benchmark share index .SSEC.
Huayi's shares had been suspended from trade prior to the auction. Upon resuming trade on Tuesday morning, they fell 5.09 percent to 9.89 yuan.
Changhong, based in southwestern China's Sichuan province, in August acquired rival Heifei Meiling Co (000521.SZ) and in June sold a 1 percent stake to Microsoft as part of an alliance to jointly develop, make and market TVs, computers and other digital home-entertainment products.
Huayi, which accounts for about one-fourth of China's compressor market, turned a profit of 7 million yuan last year after posting a loss of 142.74 million yuan in 2005.
Changhong is buying the stake from Huayi's parent company, Huayi Electrical Appliance General Co, which was ordered by a court to sell part of its shareholding to pay debts linked to the local government of Jingdezhen, in southern China's Jiangxi province, where Huayi is based. (US$1=7.3583 Yuan) (Reporting by Samuel Shen; Editing by Edmund Klamann)
