Li Ning Selling $175M Stake In His Sportswear Brand To Talent Management Firm
Li Ning, the former Chinese Olympic gymnast, "plans to sell a 25 percent stake" in his namesake sportswear brand to Viva China Holdings -- a talent management firm he controls -- for US$175M, "knocking Li Ning's shares on concerns about his commitment to the group," according to Donny Kwok of REUTERS. Shares of Viva China "more than doubled on the news." However, Li Ning the company, which "operates some 7,300 branded sports stores across China, fell more than 6 percent as investors said the deal suggested the group's founder was gradually giving up direct control of the business." Bank of America Merrill Lynch said that the Li family's "stake in the listed company would be diluted" to 17.64% from 25.23%. Shares of Chinese sportswear brand Anta Sports "benefited from the doubts about Li Ning" (REUTERS, 10/17). The WALL STREET JOURNAL's Laurie Burkitt notes Li Ning is "in the midst of a major business overhaul, replacing its senior management and repositioning its brand as a part of a three-year transformation program aimed at improving profitability and taking broader market share in China's apparel market" (WALL STREET JOURNAL, 10/17).