Bain rumor sinks Gome's shares
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Shanghai Daily, August 31, 2011
Hong Kong-listed Gome Electrical Appliances Holdings Ltd tumbled by nearly 5 percent, the most in three weeks, following rumors that shareholder Bain Capital LLC intended to reduce its stake.
China's second-largest electronics retailer fell 4.69 percent to HK$3.25 (42 US cents), while the Hang Seng Index added 1.71 percent to end at 20,204.17 points in Hong Kong yesterday.
The shares opened at HK$3.42 yesterday morning, slightly up from HK$3.41 they closed at on Monday. But the shares fell after Bain was reported to have appointed Morgan Stanley to sell its shares in Gome, according to Hong Kong newspaper Apple Daily which cited unidentified sources.
The private-equity firm holds around 9.98 percent in Gome, second only to the company's jailed founder Huang Guangyu who owns 32.19 percent.
Tim Payne of the Brunswick Group LLC, who manages public relations for Bain, declined to comment on the rumor in an interview with Bloomberg News earlier yesterday while He Yangqing, Gome's spokesman, sought to reassure via a phone call that Bain was not intending to sell its stake.
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