BELLE International Premium 15% Acquisition Of Beautiful Treasure

BELLE 1880.HK and 1179.HK finally disclosed their takeover plans last Friday.

BELLE international, which has been active in mergers and acquisitions since its listing, has proposed the comprehensive acquisition of beautiful treasure at a price of HK $6 per share, which is calculated by 262 million 300 thousand shares of all the issued shares of beautiful treasure, and the value of beautiful treasure is about 1 billion 574 million Hong Kong dollars.

The total purchase price of HK $6 per share is 5.21 higher than the closing price before the closure of Mei Bao, a premium of 15.16%.

Deng Weilin, the major shareholder and chairman of 165 million or 62.87% of the company, has promised to accept the purchase, involving a total cost of HK $989 million 600 thousand.

Since Deng Weilin and BELLE's major shareholder and director Deng Yao are cousins, the paction constitutes a related paction of BELLE and is subject to the approval of independent shareholders of BELLE.

For the acquisition, BELLE pointed out that the company's own development strategy is to focus on the development of high-end leisure shoes business.

While the price of shoes sold and distributed by the company is between $60 and $300, BELLE believes that this part of the market has great potential in the mainland and will complement the company's business.

In addition, because BELLE's overseas business, especially Hongkong's business, is managed by experienced personnel, BELLE believes that the implementation of the acquisition will benefit and enhance the company's overseas business operations.

BELLE rose 4.13% to HK $9.58 last Friday, while Mei Bao rose 12.48% to HK $5.86.

Han Zhili, a business analyst at East Asia and East Asia, said BELLE's acquisition price is equivalent to 15 times earnings in 2008, which is more reasonable.

The takeover will support BELLE's continued strong profit from mainland consumption, and Han Zhi Li expects its share price to rise 20% in the medium term to maintain a "buy" rating.

UBS also maintained BELLE's "buy" rating.

The bank pointed out that even if the large amount of cash was used to acquire the beautiful treasure, BELLE listed in May last year still held 4 billion 500 million to 5 billion yuan in cash.

The acquisition has more than 500 distribution points of the beautiful treasure, can help BELLE play a better scale of efficiency.

With the expected market rate of 36 and 27 times in 2008 and 2009, UBS maintained the target price of BELLE at HK $11.4.