Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

<p>We had previously cited the “going private” offer received by China Cord Blood as an example of the obstacles that minority investors face in obtaining fair value for their shares.  See <a href="http://www.smartkarma.com/insights/china-adr-privatizations-the-challenges-of-getting-the-best-deal" target="_blank">China ADR Privatizations: The Challenges of Getting The Best Deal</a>. Recent developments in the China Cord Blood transaction are promising, but it is too early to declare victory. </p><p>Recall that the company’s Chairman, who owns 33% of the stock (fully-diluted basis), offered to take the company private at $6.40/share in cash. The offer looked very low even in the context of a limited number of comparable transactions and very few publicly-traded peers. Over the past two weeks, two competing bidders have surfaced with potentially higher offers.  The shares now trade above the initial offer price, and the final price could exceed $12/share.</p>

We had previously cited the “going private” offer received by China Cord Blood as an example of the obstacles that minority investors face in obtaining fair value for their shares.  See China ADR Privatizations: The Challenges of Getting The Best Deal. Recent developments in the China Cord Blood transaction are promising, but it is too early to declare victory. Recall that the company’s Chairman, who owns 33% of the stock (fully-diluted basis), offered to take the company private at $6.40/share in cash. The offer looked very low even in the context of a limited number of comparable transactions and very few publicly-traded peers. Over the past two weeks, two competing bidders have surfaced with potentially higher offers.  The shares now trade above the initial offer price, and the final price could exceed $12/share.

Zhongyuan Union Cell & Gene Eng Corp (600645 CH)

Nanjing Xinjiekou Department S (600682 CH)

Global Cord Blood

China Cord Blood: We Love a Crowd