Blackstone gets closer to acquiring BlueStar stake
Tim LeeMaster and Nevin Nie
Unites States buyout firm Blackstone Group has received Beijing's approval in principle for its bid to acquire as much as 30 per cent of chemical producer China National BlueStar (Group) Corp for at least US$500 million before its planned public share offering early next year, sources said.
An announcement is expected in the next few weeks, they said.
'They're just dotting I's and crossing T's now,' said one source. 'Both companies have committed to completing the deal.'
Another source said some shareholding issues were still outstanding, but declined to elaborate. Typically such issues can include the number of board seats open to the buyer.
BlueStar, considered one of the better units of China National Chemical Corp, the mainland's largest chemical maker, planned to make an initial public offering in the first quarter of next year, a source said.
'They'll raise US$500 million comfortably,' the source said.
That is a change from last year when bankers walked away from a planned US$300 million share sale because the company's financial situation was considered too dire to proceed, market sources said earlier.
BlueStar owns stakes in three domestically listed companies - BlueStar Cleaning, soda, resin and petrol producer Shenyang Chemical Industry, and BlueStar New Materials, the mainland's largest producer of organosilicone, a compound used in electronics and construction materials.
BlueStar recorded assets of 30 billion yuan and sales revenue of more than 30 billion yuan at the end of 2005, according to its website.
'BlueStar is in a sector that is becoming more and more market oriented', said Ping An Securities chemical sector analyst Cheng Lei.
'We are watching its listed subsidiaries closely as we expect internal management and the company's marketing network to improve after the deal, which may bring more growth potential to the companies.'
Blackstone raised US$21.7 billion for the world's biggest private-equity fund, just as a global credit crunch threatens the pace of leveraged buyouts, Bloomberg reported yesterday. The fund tops the US$20 billion amassed by Goldman Sachs Group in April.