WUXI Little Swan Co said its controlling shareholder plans to sell its entire stake in the washing-machine maker.
Wuxi Guolian Development (Group) Co Ltd, a state-owned enterprise which holds a 24-percent stake in Little Swan, informed the Shenzhen-listed company on Monday that it plans to transfer 87.67 million A-shares to potential buyers, Little Swan told the Shenzhen Stock Exchange yesterday.
Jiangsu-based Little Swan, which didn't reveal the price of the disposal, was suspended from trading pending an announcement.
Media reports said Guangdong Midea Electric Appliances Co and Sichuan Changhong Electric Co are interested in acquiring the stake. Little Swan's board secretary declined to comment.
"Companies which are interested in the deal can contact us, but the official negotiation will begin after approval from the provincial state-owned assets administration authority," Guolian chairman Wang Xilin told the 21st Century Business Herald.
Wang also denied that Guolian had reached a "secret deal" with Midea.
"We prefer choosing a company that can offer a higher price, and the price will follow the local state-owned asset administration commission's regulations," Wang said.
The 24-percent stake could be worth between 1.6 billion yuan and 1.8 billion yuan, according to the calculation method stipulated by State-owned Assets Supervision and Administration Commission of the State Council and the China Securities Regulatory Commission.
China Galaxy Securities analyst Zhu Linjun said Little Swan would benefit from better sales channels and cheaper materials costs if it cooperated with a domestic appliance giant such as Midea.
For Midea, buying Little Swan would be faster than developing its own washing-machine brand.