HK's Pou Sheng says plan to go private canceled after shareholder opposition

HONG KONG (Reuters) - Chinese sportswear retailer Pou Sheng International (Holdings) Ltd 3813.HK said its parent's plan to take the company private had been canceled as more than 10 percent of shareholders voted against the proposal.

Pou Sheng's parent firm, Taiwan's Pou Chen Corp 9904.TW proposed taking Pou Sheng private in a deal valuing it at $1.4 billion.

Shares in Pou Sheng fell nearly 36 percent in early Tuesday trade on the news.

Pou Sheng's largest shareholder Yue Yuen Industrial (Holdings) Ltd 0551.HK had agreed to sell its 62 percent stake in the company as part of the plan to privatize. After the planned sale, Yue Yuen planned to distribute a special dividend to its shareholders.

With the privatization canceled there will now be no special dividend, Yue Yuen said in a separate statement. Its shares slid 11 percent on Tuesday.

Yue Yuen had agreed to sell its stake in Pou Sheng at a cancellation price of HK$2.03 per share, which would value Pou Sheng at HK$11 billion ($1.4 billion). The offered price however was still at a discount to Pou Sheng’s initial public offering price of HK$3.05 per share.

Pou Sheng was spun off from Yue Yuen and listed separately in 2008. Its share price has never matched or exceeded the IPO price.

Pou Chen, Yue Yuen or any other related party in the privatization proposal cannot propose another deal within the next 12 months, Pou Sheng said.

Reporting by Donny Kwok and Kane Wu; Editing by Edwina Gibbs and Christian Schmollinger