Core Viewpoint - China Traditional Chinese Medicine (CTCM) is set to be privatized by China National Pharmaceutical Group (Sinopharm) at a cash price of HKD 4.6 per share, representing a 34.11% premium over the latest closing price, with a total consideration of approximately HKD 154.5 billion [1][2]. Group 1: Privatization Proposal - Sinopharm's proposal to privatize CTCM has been officially announced, with the board agreeing to present the proposal to shareholders [1]. - The privatization plan involves the cancellation of shares held by controlling shareholders at a specified price, with the remaining shares being canceled at HKD 4.6 per share [2]. - Following the cancellation, CTCM will issue new shares to restore its capital structure, resulting in full ownership by Sinopharm [2]. Group 2: Historical Context - Rumors of CTCM's privatization have circulated three times since 2021, each time causing a temporary spike in the company's stock price [1]. - Previous attempts to privatize CTCM included a proposal in January 2021 at a price of at least HKD 5.10 per share and another in December 2022, which was denied by the company [1][2]. - The latest rumors in February 2023 led to a significant increase in CTCM's stock price, indicating strong market interest [1]. Group 3: Company Overview - CTCM is a wholly-owned subsidiary of Sinopharm and serves as a core investment platform for the traditional Chinese medicine sector [2]. - The company has a comprehensive industrial chain, including research, manufacturing, and sales, with over 800 finished product specifications and a workforce of approximately 18,000 employees [2][3]. - CTCM emphasizes the legal and rational development of medicinal resources, particularly in the areas of endangered medicinal materials and imports/exports [3]. Group 4: Rationale for Privatization - CTCM cites limited functionality as a public financing platform and low stock trading prices as reasons for the privatization, which would streamline governance and optimize organizational structure [3]. - For Sinopharm, privatizing CTCM enhances financing flexibility and reduces exposure to public market volatility [3].
154.5亿，中国中药被私有化