Viva China Holdings share soar on back of Li Ning deal

Viva China Holdings share soar on back of Li Ning deal

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Viva China Holdings’ agreement to buy a stake in China’s sportswear group Li Ning has caused its shares to surge up to 94 percent. The increase in shares is the sports talent management’s highest in 5 years.

In the Hang Seng Index, shares of Li Ning actually fell by 3 percent, however Viva’s shares rose to HK$0.153, a high point since May 30, 2012. Li Ning’s founder plans on selling a 25 percent stake from his sportswear group to Viva, his talent management venture, for $175 million. A move which could have led to the drop in Li Ning’s shares as shareholders question his commitment to the group.

Olympic gymnast Li Ning controls Viva China, and is backed by a private equity group from the US known as TPG Capital as well as GIC from Singapore. Adidas and Nike are competitors of Li Ning, along with Anta Sports Products, who added almost 5 percent to HK$7.24 as a result of shareholders questioning Li Ning.

According to Viva, buying a stake in Li Ning is aimed at exploring strategic development opportunities in sports advertising and sponsorship as well as expanding its business in China. The deal would be settled after new shares are issued after a five-for-one share consolidation.