CORRECTED-UPDATE 1-Chinese sportswear retailer Pou Sheng Int'l receives $1.4 bln privatisation offer

(Corrects amount to HK$11 billion, from $11 billion, in first paragraph)

HONG KONG, Jan 21 (Reuters) - Chinese sportswear retailer Pou Sheng International (Holdings) Ltd has received a proposal from Pou Chen Corp to be taken private that values it at around HK$11 billion ($1.4 billion), it said in a stock exchange filing on Sunday.

Pou Chen Corp has offered Pou Sheng International a cancellation price of HK$2.03 per share, which represents a premium of around 31.82 percent over Pou Sheng’s last closing price.

Pou Sheng International shareholder Yue Yuen Industrial (Holdings) Ltd will sell its 62.41 percent stake in Pou Sheng to Pou Chen as part of the proposal at the cancellation price for a total of HK$6.8 billion, according to the stock filing. Pou Chen owns 49.99 percent of Yue Yuen Industrial.

The move follows a similar transaction last April, when a consortium led by private equity firms Hillhouse Capital Group and CDH Investments offered to buy out Hong Kong-listed Belle International Holdings Ltd in a $6.8 billion deal, as retailers seek new growth from e-commerce channels and tackle competition from online rivals.

The proposal said the sporting goods industry “is experiencing unprecedented changes and challenges” from the rise of online shopping which has changed customers’ expectations and increased market competition.

Pou Sheng International would need “significant investments” to transform its business and would have flexibility and more advantageous financing if it were to be taken private, according to the proposal.

The boards of Pou Chen and Pou Sheng believe Pou Sheng’s listing status is ineffective in providing a sufficient source of funding for the company’s business and growth, the proposal said.

Pou Chen, a leading Taiwanese footwear manufacturer, will not increase the offer price, according to the stock filing.

Citigroup is acting as financial advisor to Pou Chen. (Reporting by Kane Wu; Editing by Susan Fenton)