Beijing: The controlling shareholder of Lenovo’s parent company wants to sell nearly half of its holdings, as it looks for strategic partners to help bolster the firm’s business, a spokeswoman said on Monday.
The asset management unit of the Chinese Academy of Sciences is seeking yuan2.76 billion ($404 million) for 29% of Legend Holdings, said a spokeswoman for Legend, parent of the world’s No. 4 PC maker. The Academy currently owns 65% of Legend Holdings.
Lenovo dominates its home PC market in China, but has struggled on the world stage, especially in developed markets, since its landmark acquisition of IBM’s PC assets in 2004. The Academy is seeking a new investor to help improve management of the firm, the spokeswoman said.
“It is meant to improve the corporate governance structure of Legend Holdings and to introduce more resources from new investors,” she said, adding the planned sale is in line with the Academy’s push to make its subsidiaries more market-oriented.
The bidder should have no less than yuan4 billion ($585.3 million) of registered capital and its major business should cover finance, energy and real estate, she said, without elaborating.
Lenovo shares were up 1.29% midway through the trading day in Hong Kong.
The planned sale should have no immediate impact on the listed Lenovo, but will benefit Legend Holdings in the longer run, said Charles Gu, an analyst with JPMorgan.
“A new investor will bring in new expertise,” he said, adding that potential buyers were most likely to be domestic.
Founded in 1984 as a spin-off of the Chinese Academy of Sciences, Lenovo started as a distributor for foreign brands and began its own production in 1990.
Lenovo’s share of the global PC market in the second quarter rose 0.5 percentage points to 8.7%, research firm IDC said, reversing consecutive quarters of falling market share.
Lenovo reported a third straight quarterly loss in April-June, but the loss was smaller than expected thanks in part to China’s massive stimulus package, stabilising consumer demand and a slew of cost-cutting measures.