Updated at 5.51pm: Mainland VCD player maker Golden Yuxing Electronics is battling the Founder Group for control of Founder Science and Technology, one of the IT firm's three listed units.
Yuxing Electronics announced earlier this month it has teamed up with five partners in what appeared to be a hostile takeover bid for Founder Sci-Tech. The partners bought 5.4 per cent of Founder Sci-Tech in early May. Yuxing demanded adding six new members to the nine-number board and a board meeting to discuss a revision of the 2000 dividend plan.
Yuxing president Zhu Shawei told China Computerworld last week the bid would help Yuxing enter the IT industry. Yuxing, which makes VCD players and TV-Internet set-top boxes, listed on the Hong Kong Growth Enterprise Market last year and watched profits sink 62 per cent.
To parry the blows, Founder Group raised its stake from 4.55 per cent to about 5 per cent in Founder Sci-Tech. It bought the company, now a Shanghai-based subsidiary, three years ago and listed it on the A-share market in Shanghai. Founder Sci-Tech makes computer hardware.
The shares of other investors are too small to influence voting power on the board of directors.
Mr Zhu said he would vote on behalf of the six-way partnership at a Founder Sci-Tech board meeting this month. Founder Sci-Tech shares increased by 8.63 per cent to just below 40 yuan (US$4.83) on the day the take-over battle began.
