Global sourcing firm Li & Fung receives $931 million offer to go private

HONG KONG (Reuters) - Hong Kong-listed global sourcing and logistics group Li & Fung Ltd 0494.HK said on Friday it had received an offer worth $931 million to take the company private.

Golden Lincoln Holdings, an entity formed by Li & Fung’s controlling shareholders and Singaporean warehousing and logistics firm GLP, proposed to buy out Li & Fung’s controlling shareholders for HK$1.25 per share, the company said in a filing to the Hong Kong Stock Exchange.

The deal values the company at around $1.4 billion.

The price is about 72.7% over the company’s average closing price in the last 60 days and more than double its Friday close of HK$0.50 apiece.

The buyer will pay about HK$7.22 billion ($931 million) in cash for the deal, and will not increase the price, according to the filing.

The deal comes as businesses worldwide have been heavily hit by the coronavirus pandemic that has infected nearly 200,000 people so far, claimed over 7,800 lives and disrupted trade, travel and lifestyles.

Li & Fung, which supplies clothing and other products to retailers worldwide, said on Friday that retail has been weak over the first two months of this year and that COVID-19 will cause major uncertainty for 2020 and beyond.

The company also said it had undertaken restructuring efforts to reposition its businesses and to improve its competitive advantage due to digital disruption to the retail industry, but said its financial performance had remained under pressure despite the efforts.

Golden Lincoln is ultimately controlled by the Fung family holding 60% of voting shares, with GLP holding the remaining 40% of voting shares and 100% of non-voting shares. GLP has an effective economic ownership of 67.67% of the buyer as a result.

Reporting by Kane Wu; Editing by Kim Coghill