billieblow and dirty chinese money: Xinhua Finance Media Shares Soar After Chinese Company Discloses Investment by Yucaipa
NEW YORK (AP) -- Shares in Xinhua Finance Media Ltd. soared early Wednesday after the company disclosed that The Yucaipa Cos., a U.S. investment firm where former President Bill Clinton is a senior adviser, had taken a stake in the troubled Chinese company and would add a partner to its board of directors.
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Xinhua Finance Media has been beset by troubles since its initial public offering in March. Its stock has slumped well below its IPO price, and the company revamped its governance policies in May after its chief financial officer resigned.
The company, a business publisher and broadcaster based in Beijing, is a subsidiary of Xinhua Finance, a major Chinese financial information and media company.
Barron's had reported that Xinhua Finance Media failed to disclose information in its IPO related to a brokerage firm that the former CFO ran, and earlier this month Standard & Poor's lowered its credit rating on Xinhua further into junk territory, to "B" from "B+."
Xinhua's U.S.-listed shares rose 90 cents, or 11 percent, to close at $8.78 Wednesday after the announcement of the investment by Yucaipa, run by billionaire investor Ron Burkle. The shares had traded steadily lower following the company's initial offering price of $13 per share in March.
A Xinhua spokeswoman, responding to an e-mail query, declined to disclose the size of Yucaipa's new stake in the company. A Yucaipa spokesman didn't immediately return a call for comment.
Xinhua, which is based in Beijing, said in a statement that Yucaipa had agreed to buy a block of shares from investors who were no longer bound by a "lockup" agreement, which requires purchasers of IPO shares to hold them for a minimum period of time.
As part of the transaction, Yucaipa partner David Olson will join Xinhua's board as an independent director. Xinhua said that Olson had previously been in charge of the Asian operations of Donaldson, Lufkin & Jenrette and had also led investment banking operations in Asia for Credit Suisse First Boston.
Burkle, who has long been close to Clinton, made a fortune investing in the supermarket business and had expressed interest in several newspaper companies that came up for sale over the past year, including Tribune Co., publisher of the Los Angeles Times and other newspapers. |
