TPG, Newbridge, GA reap $133m in Lenovo share sale

The sale marks the second time the firms have sold shares in the Hong Kong-listed computer maker, having long ago made back their original $350m investment.

Chinese computer maker Lenovo is proving a profitable investment for TPG, Newbridge Capital and General Atlantic funds.

The investors on Tuesday sold 291.5 million Lenovo shares, raising a total of HK$1.03 billion (€92 million; $133 million).

It follows on from a November 2007 private placement of shares, which raised roughly $374 million – more than the firms’ initial $350 million investment made in 2005. That deal, which provided the means for Lenovo’s acquisition of IBM’s personal computer business, saw TPG invest $200 million, General Atlantic invest $100 million and Newbridge invest $50 million.

“It’s in the nature of these buyout funds to take profit on their investments when there is money to be made,” Joseph Ho, Daiwa Securities SMBC analyst, told Bloomberg. “The divestments don’t mean the shares have peaked.”

ThinkPad: providing buyout firm returns

The Bloomberg report noted Lenovo’s shares had risen roughly 60 percent this year, but dropped nearly 6 percent following the buyout firms’ partial exit.

Legend Holdings, the parent of China-focused private equity firm Hony Capital, is Lenovo’s largest shareholder and said Tuesday it planned to become a publicly listed entity, in part to boost Lenovo’s market share. 

The holding company’s co-founder and chairman, Liu Chuanzhi, said at a press conference that the computer maker had encountered “difficulties in the past with government-related orders as it was seen as a state-controlled company”, according to the Financial Times.

Legend owns 42.3 percent of Lenovo, which is best known for its ThinkPad brand of laptop.

Newbridge was subsumed by TPG in 2006; it had previously been the firm’s joint venture in Asia with San Francisco-based private equity firm Blum Capital.