Bonvests, Tai Tak bow out as Cordlife's substantial shareholders

Singapore

THE "play" by Cordlife Group's two longtime substantial shareholders - less than three months after they demanded board seats in the cord-blood banking firm (they got their way shortly after) - has taken an unexpected yet possibly promising turn.

Singapore-listed Bonvests Holdings and Tai Tak Estates Sdn Bhd are selling their 20 per cent interest (each is selling 10 per cent) in Cordlife to China's retail giant Nanjing Xinjiekou Department Store for S$86.6 million or S$1.67 a share - a sweet 32 per cent premium over Cordlife's S$1.265 closing price on Thursday, a day before the announcement on Friday.

Shanghai-listed Nanjing Xinjiekou announced on the stock exchange that its board had on Thursday night approved the purchase of 51.87 million shares in Cordlife from Well Spring Pte Ltd, Providence Investment Pte Ltd and Coop International Pte Ltd to "aid" the firm's expansion into the cord blood business in South-east Asia.

Based on Cordlife's latest annual report, Bonvests owns a deemed interest of 11.22 per cent in Cordlife via wholly owned Coop International, whereas Tai Tak Estates holds an 11.3 deemed interest via Wells Spring and Providence Investment, which leaves both firms with a much reduced stake of just over one per cent post-disposal.

"One chapter closes and another, bigger one, could well open for Cordlife," said an avid Cordlife watcher, following the latest development.

Displeased by Cordlife's removal of its longtime chief executive Jeremy Yee in March, Bonvests and Tai Tak Estates called for a shareholder meeting to snag a board seat each in Cordlife, ostensibly to protect their investments in the firm; this was the first time both shareholders had sought board representation in the firm in which they have been invested since its listing in 2012.

They got their wish not too long after (and scrapped their call for a shareholder meeting), which alongside several other concurrent board appointments led to a much-expanded Cordlife board from five to 11 members.

Now, Nanjing Xinjiekou (China's largest department store operator) has emerged as Cordlife's major shareholder with a nearly 30 per cent stake - it is close to completing its buyout of China Cord Blood Corp, which has a 9.8 per cent deemed interest in Cordlife, from Golden Meditech Holdings.

This could mean big things for the Singapore firm that has long wanted to ratchet up its China aspirations but has disappointed thus far, operationally speaking.

Nanjing Xinjiekou could add much-needed heft to Cordlife's China goals; it's a subsidiary of Sanpower Group, a huge conglomerate founded by Chinese tycoon Yuan Yafei. Sanpower bought the UK's House of Fraser in 2014 and is currently bidding for McDonald's Hong Kong and China businesses in an auction that could reportedly fetch up to US$3 billion.

All that promise plus the price tag of the recent stake sale galvanised Cordlife shares on Friday, with the stock closing five Singapore cents or nearly 4 per cent higher at S$1.315.