PE firms to buy China's largest women's shoe retailer Belle in a $5.82 bn deal

A consortium of private equity firms yesterday struck a deal to buy China's largest women's shoe retailer Belle International Holdings Ltd in a HK$45.3 billion ($5.82 billion) deal.

Muse Holdings-B Inc, which includes private-equity investors Hillhouse Capital and CDH Group and Belle's management, has offered to pay other shareholders HK$6.30 a share in cash, valuing Belle at HK$53 billion.

The offer is at a premium of 19.54 per cent to Belle International's closing price of HK$5.2700 on the last trading day before it was halted on 18 April pending announcement of the deal.

Muse Holdings will fund the acquisition through a HK$28 billion debt facility provided by Bank of America and a cash investment of HK$17.31 billion.

Post closing, Hillhouse will own 56.8-per cent stake in Belle, while CDH will hold 12.1 per cent and the remaining with the management.

Founded in 1991 by chairman Tang Yiu, Belle is the largest women's shoe retailer in China, with 22 per cent market share.

Its brands include Belle, Staccato, Joy & Peace, Millie's, JipiJapa, Mirabell, Tata, Teenmix,  Senda, Basto, SKAP, 15MINS, Map by Belle, and others, while it also sells other brands like Bata, CAT, Clarks, Fitflop, Hush Puppies, Mephisto and Merrell.

It also distributes sportswear brands like Nike, Adidas, Puma, Converse, Vans, Timberland, Asics, Onitsuka Tiger and apparel brands MOUSSY, SLY and REPLAY.

It has 20,873 company-managed retail outlets in mainland China and nearly 200 retail outlets in Hong Kong and Macau.

The company had issued a profit warning in March and said that it expected to see a 15-25 per cent fall in profit when it reports full-year earnings in May.

Sheng Fang, CEO of Belle said that the company can be turned around if it is privatised and free from "short-term distractions arising from the public equities" as it also involves risks.