Chinese group to offload part stake in Lenovo parent
10 Aug 2009
The Chinese Academy of Sciences, which holds a controlling stake in Legend Holdings, the parent company of the Lenovo Group, has offered to sell 29 per cent equity in the world's fourth-largest computer maker for $408.8 million, but with conditions.
The academy, which holds 65 per cent stake in Legend, will remain its key shareholder with a 36 per cent post-sale stake and the buyer should hold on to the stake for five years.
The prospective buyer, preferably a single entity, must also have operations in finance, energy and real estate. The academy will hold an auction if there are more than one bidder after the offer closes on 3 September.
Employees hold the remaining 35 per cent stake, Legend said in an announcement issued through financial firm Beijing Equity Exchange.
Lenovo reported a $16-million loss in the April-June 2009 quarter amidst weak global demand and intense competition as against a $110 million profit reported in the same quarter of the previous year.
Sales, however, fell 17.9 per cent from a year earlier to $3.5 billion. Global PC sales rose 1.1 per cent from a year earlier while sales fell 3.3 per cent industrywide. However, average selling prices fell 20 per cent due to competition.