Huiyuan shares rise as Danone sells stake to PE firm

Shares of Huiyuan Juice Group (1886.HK) rose 8% on news that Danone (BN.FR) is selling its stake in China’s largest beverage maker to Hong Kong private equity group SAIF Partners for US$259.6 million, Dow Jones Newswires reported. Danone will sell its holding for HK$6 (US$0.77) per share, more than 50% less than the price offered by Coca-Cola (KO.NYSE) in its failed acquisition of Huiyuan in 2008. Coca-Cola’s bid was blocked by Chinese regulators over monopoly concerns. Huiyuan management said the firm is looking at domestic M&A opportunities to shore up its competitive position in a fragmented and intensively competitive domestic beverage market. SAIF explained that its position in Huiyuan is part of a long-term strategy and that the firm may raise its stake in the future. Danone said it is abandoning Huiyuan to concentrate on its four core product lines: bottled water, baby food, dairy products and medical nutrition products. Analysts don’t expect the sale to have any effect on Huiyuan’s operations or profitability.