Jack Ma’s Yunfeng in HK-listed pharma deal

A consortium including the private equity firm has subscribed to $1.6bn worth of Baiyunshan shares

Chinese pharmaceutical company Guangzhou Baiyunshan Pharmaceutical Holdings has said it will issue as much as RMB 10 billion ($1.6 billion; €1.37 billion) worth of shares to a consortium of investors including Yunfeng Capital, the private equity firm owned by Alibaba Group chairman Jack Ma.

Yunfeng will buy around RMB 500 million ($68.5 million) in shares, according to a disclosure on the Hong Kong Stock Exchange. Other investors in the deal include Guangzhou Pharmaceutical, the controlling shareholder, and one state-owned enterprise.

The subscription price is RMB 23.84 per new A share, representing a discount of around 12 percent to the closing price of RMB 27.11 per A share on 3 December 2014, the last trading day before the deal was initially publicised.

The Chinese pharmaceutical company’s shares climbed as much as 24 percent to HK$29 ($3.74; €3.17) yesterday, the biggest day gain since 2008, before trading at HK$27.85 as of 2 p.m. local time on 13 January 2015, according to Bloomberg.

Baiyunshan, which makes Chinese and western pharmaceutical products, said RMB 1 billion from the sale will be used for mergers and acquisitions, logistics and an e-commerce platform for online sales.

Yunfeng, which was founded by Ma and Target Media founder David Yu, has been actively investing in Chinese companies listed across the globe, having raised $1.1 billion for its second private equity offering in May last year.

The firm, which is also invested in Alibaba, joined up with the e-commerce giant to invest in Chinese internet television company Youku Tudou in April last year.

The pair injected $1.22 billion into the business, which is listed on the New York Stock Exchange, taking over 707 million newly issued shares and 13.8 million existing Class A ordinary shares in the business at a price of about $1.69 per share or $30.50 per American depositary share.