A Chinese company controlled by Li Ning plans to buy a controlling stake in Hong Kong-listed apparel group Bossini, with plans to expand the business in Mainland China.
A venture called Viva China will buy 1.09 billion shares in Bossini, paying just HK$46.6 million (US$6 million) for 66.6 percent of Bossini’s issued capital, effectively buying out the family interests of Bossini’s founder Law Ting-pong. After that deal is concluded, the buyer is required under Hong Kong stock exchange rules to offer to buy out the remaining shareholders, which would lead to the company’s privatization. However, in a stock-exchange filing, Viva China said it intends to maintain the company’s listing.
The offer for Bossini’s shares represents a discount of 71 percent to the 14.8 cents Bossini shares last traded at and an 87.39-per-cent discount to its December net asset value of $560.2 million. The offer reflects “the deteriorating financial performance of Bossini Group and its widening loss in the latest financial years (2018 net loss of $29 million; 2019 net loss of $139.1 million),” according to the filing. A further loss is expected in the current trading year, with the company recording a $93 million deficit in the first half.
Viva China Group is principally engaged in sports competition, event production and facilities
management, esports, sports-talent management and last year expanded into the development, design, and sale of sports, health, and leisure consumables. As part of that plan, the company has been actively seeking investment in an apparel brand.
Viva currently owns about 13.42 percent of Li Ning Company, the sports apparel retail brand established by its namesake, a former Chinese Olympiad. Li Ning facilitated an introduction between Bossini and Viva China and is effectively underwriting the purchase through companies he controls.
Keystar, the other partner in the entity bidding for Bossini’s shares, is owned by Boso Law, a nephew of the Bossini founder, who is CEO of Laws Fashion Group.
Viva believes there is strong potential to expand Bossini’s existing network of 180 stores in Mainland China, now largely based in Guangdong province, across the county.
“The Viva China board will work together with the existing management of the Bossini Group to
rejuvenate the brand of Bossini with a younger image to appeal to younger generation in the PRC. It will also renovate the stores of Bossini to enhance its layout so as to create a more immersive retail experience to the customers and capture the minds of the young generation,” the company said in the filing.