The Takeover Thread - Recon Group - NOW WITH NEW POLL

[Hillbilly]

I'm not filled with confidence about this takeover. There just seems to be something a bit whiffy. He'll have the benefit of doubt for now though.

[UK Redsox]

Can someone cut and paste the FT article ?

[paul_e]

This articles worries me: http://www.ft.com/cms/s/0/9969d8b0-1e63-11e6-b286-cddde55ca122.html#axzz49CIb7ncT

'Aston Villa's Chinese Buyer DOES NOT control 5 companies'

Me too. All sounds very vague, there could well be more unsettling revelations to come.

Has anyone read the whole story rather than just the headline?  I ask because you need to subscribe to read it and without seeing the whole story we can't really comment on it.

[AVH87]

Here's the Financial Times article from today:

The Chinese business group which has agreed to buy Aston Villa football club admitted on Friday that it controlled only one listed company, not the five previously claimed in a press release.

The admission raises questions about the due diligence on Tony Xia, the businessman behind the deal. He is chairman of the Recon Group, a Beijing and Hangzhou based private holding company which controls 75 per cent of Lotus Health Group, a large producer of the food additive MSG.

On the website of the Aston Villa football club, a biography of Mr Xia — posted on May 18 when the sale was announced — reads: “Recon Group is a privately owned holding company that owns the controlling interest in five publicly listed companies on the Hong Kong and Chinese stock exchanges.”

The Recon Group website appears to show the group has several listed subsidiaries, however stock exchange filings show that Recon Group only has a significant stake in Lotus Health.

A Hangzhou-based spokesman for Recon reached by telephone on Friday, who identified himself only as Mr Jin, admitted the company “currently only has controlling share in Lotus Health”.

Meanwhile, he said: “The acquisition deals for the remaining four companies are still being finalised and should come out soon.” He declined to name the companies.

The Recon Group said the mistaken information contained in the press release had been the result of a “miscommunication” with Aston Villa, and they would ask the football club to change the wording of the statement.

The information raises questions not just about the truthfulness of the claims surrounding Mr Xia’s business dealings, but about the financial health of Mr Xia’s business group, which agreed this week to pay an undisclosed sum for Villa.

Last month, Lotus — Recon’s only verifiable asset — announced it had made a net loss in 2015 of Rmb508.5m ($77.6m) on revenues of Rmb1.7bn, compared with a net profit of Rmb23.9m the previous year.

Lotus produces 150,000 tonnes of MSG, exporting to more than 70 countries every year, according to Shanghai stock exchange filings, as well as other food additives.

Recon Group’s other revenues were unclear as the group does not appear to have ever published an audited financial statement.

In addition Mr Jin denied an assertion by Steve Hollis, Villa’s Chairman, who was quoted on Thursday saying that Mr Xia had helped to build the Bird’s Nest Olympic stadium in Beijing.

“Again, you need to ask him but he is responsible for the Bird’s Nest in Beijing and some of the other major iconic developments in China” Mr Hollis was quoted in an article in the Birmingham Mail.

“Xia was never involved in the planning or designing of the Bird’s Nest stadium. Xia’s expertise is in urban design” said Mr Jin.

A spokesman for Aston Villa confirmed that Mr Hollis was accurately quoted, but said he was not sure what information Mr Hollis was citing.

[not3bad]

This articles worries me: http://www.ft.com/cms/s/0/9969d8b0-1e63-11e6-b286-cddde55ca122.html#axzz49CIb7ncT

'Aston Villa's Chinese Buyer DOES NOT control 5 companies'

You need to be subscriber to read it.

[brian green]

The single thing that fills me with silent, secret joy about all this is that deal just MIGHT be as good as it is being made out to be.

Come trolls, come miserablists, come naysayers and Private Frazers, it just MIGHT work out well for us.

[oldhill_avfc]

No it wont

he's a liar liar pants on fire

stay well clear

[Scott Nielsen]

There is substantial amounts (billions) of money looking to get out of China.This money has been flooding into real estate San Fran, NY London. Commodity producers in Africa and all sorts of other asset classes across the globe. So it is not that far fetched to think that this deal may be part of a larger investment scheme. The Chinese have been doing this without debt, that is not the driver, the attraction is to get the currrency out of Remimbi and into other currency denominated assets. Of course it could all be Rubbish.

True. These sort of holding companies is a perfectly legitimate way to to put assets offshore (and/or launder money), and preferably to also lose money so that cash must be constantly sent offshore to places where PRC cant grab it back. 
I don't mean to suggest this is the intention of Xia, just that this is very common and it doesn't necessarily mean laundering of ill-gotten gains.

[DaveD]

At least two 'miscommunications' in the first announcement isn't an auspicious start.

[David_Nab]

All looking a little dodgy so far ......

[oldhill_avfc]

The Chinese may be well be looking to invest substantial sums off shore. 

I just don't see how a regeneration of Aston stacks up alongside buying property in London or NY or similar.

[chrisf]

That's me back in the healthy scepticism camp then

[oldhill_avfc]

error

[tomd2103]

Errr, this is starting to sound a bit dodgy.  Please don't say Lerner has been hoodwinked by yet another charlatan. 

[frank black]

This isn't going to end well is it.

Randy's goodbye single fingered salute, I fear.