An unnamed institutional investor sold 32 million shares in Li Ning Company on Friday, raising a total of HK$470 million ($60.3 million). The share price of the sportswear designer and retailer has performed well recently, providing a good opportunity for profit taking. CLSA was the sole bookrunner for the deal.
The deal, which represented a 3.1% stake in the company, launched after the market closed and remained open long enough to allow US and European investors to participate. The shares were offered in a range between HK$14.50 and HK$15.20 apiece, with a corresponding discount range of between 3.6% and 8% to the latest closing price of HK$15.76. The final price fixed at HK$14.70 for a 6.7% discount.
The order book was twice covered at the final price with 35 accounts coming on board. The demand was predominantly Asian, with this region accounting for around 65%. The US took up around 25% and the remaining 10% went to UK investors. According to a source, the investors were mostly long-only funds, and included a good number of pre-existing shareholders as well as some new investors.
The company is named after its founder, Li Ning, a former gymnast who caught international attention when he lit the flame at the opening ceremony of the Olympics in Beijing last year. Such good publicity could have had something to do with the company's strong results: in 2008, revenue increased by 53.8% on 2007 to Rmb6.7 billion ($983 million) and operating profits were up 57.4% to Rmb960 million.
The strong results, released in the middle of March, helped sustain a rally in the company's share price. Having dropped below HK$10 in early March, the shares are now just under HK$16 a share -- a level last seen in October 2008.
Last year there were two placements of a similar size in Li Ning stock. In March, the founder sold a 2% stake for $75 million, and in May an investor cashed out for $59 million.