Thursday, September 10, 2015


Cordlife: (S$1.385) Jayhawk Capital urges CCBC's shareholders to reject offers
Yesterday, the second largest shareholder of 13.4%-owned China Cord Blood Corp (CCBC), Jayhawk Capital, sent its second open letter to CCBC urging shareholders to reject all three privatisation offers.

In the letter, the US-based private equity firm pointed to the "extremely low" privatisation offer of US$6.40/share by Golden Meditech (GM), and flagged that GM may raise its offer price to US$9-US$10/share, in response to the significantly higher offers by two other bidders.

Jayhawk reiterated its view that CCBC is worth US$20-US$25, if the company heeds its call to:
1) Pay a special dividend of US$125m
2) Implement a US$125m share repurchase programme
3) Pay out regular dividends

Further, the shareholder believes that CCBC may trade up to US$75-US$100 over the next 4-5 years, if it manages to achieve subscriber growth of 10-15%.

The "fair value" prices dwarf CCBC's last traded share price of US$6.40.

Nonetheless, Cordlife is sitting comfortably as the third largest shareholder in CCBC amid the ongoing bidding war.

Maybank-KE's SOTP-derived TP of $1.53/share comprises $0.38/share worth of cash, derived from Cordlife realizing its 13.4% stake in CCBC via the offer from GM. Any other formal counter-offer would be a bonus.

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