By Kane Wu and Rajasik Mukherjee
(Reuters) -China-headquartered medical device maker Kangji Medical said on Tuesday it had received a go-private proposal from a consortium backed by investment firm TPG, valuing the firm at HK$11.17 billion ($1.42 billion).
TPG, together with a wholly-owned unit under Qatar Investment Authority and Kangji Medical’s chairman Zhong Ming, are offering HK$9.25 a share to buy out Kangji Medical.
The offer price represents a 21.7% premium over the closing price on June 30, the last undisturbed date, and a 47.3% premium over the 360-trading day average price up to and including the undisturbed date, the statement said.
The joint statement did not explain why they determined June 30 was the last undisturbed trading date. Kangji’s shares surged on July 2 and July 3, which indicated speculative trading, and the stock was put on a trading halt on July 18.
The offer price presents a 9.9% premium over Kangji’s closing price on Tuesday at HK$8.42 apiece.
The shares opened 5.4% higher on Wednesday but have since slipped to trade roughly unchanged.
There were limited benefits for Kangji to remain listed following the long-term underperformance of its share price and subdued trading liquidity that hurt its fundraising ability, and given listing costs, the statement said.
The company’s future growth requires significant investment which could weigh on its financial performance in the near term and going private would alleviate that pressure, it said.
Founded in 2004 and based in Hangzhou, Kangji designs and makes minimally invasive surgical instruments, serving hospitals and distributors across China and overseas.
TPG first invested in Kangji in 2017 for a minority stake and stayed on as an investor after its 2020 initial public offering.
If the deal is approved, the company will delist from the Hong Kong Stock Exchange and become a unit of the buying firm.
Kangji is controlled by its chairman and his spouse who together hold 52.98%. Following the privatisation, the couple will remain the largest shareholders in the company with a reduced 40% stake, according to the statement.
The deal will be done via Knight Bidco Ltd, an entity jointly owned by the investors, according to a joint statement by the company and the investors.
($1 = 7.8495 Hong Kong dollars)
(Reporting by Kane Wu in Hong Kong and Rajasik Mukherjee in Bengaluru; Editing by Sahal Muhammed and Sonali Paul)
