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Legend, Digital China Scramble for Kejian Licence
Legend Holding Ltd and Digital China could face off in a takeover bid to acquire a licence from a loss-making company that would allow them to manufacture mobile phones, as the lastest Business Weekly reported.
The 21CN Business Herald��quoting an unidentified source, said both companies showed interest in taking over the Shenzhen-based China Kejian Co Ltd , a public-listed company controlled by the Chinese Academy of Sciences, if the latter decided to sell the company's 29 per cent or 33.6 million shares.
Kejian has been caught in a dire cash shortage since the beginning of this year, the report said. The licence it has to manufacture mobile phones�� which the government stopped issuing in 1998, made it an ideal takeover target for companies like Legend and Digital China seeking to start mobile phone business.
However, both sides declined to comment on the market rumours, according to the report.
Lin Yang, vice-president of Digital China, said the company would not consider any acquisition in the near future.
The report said if the acquisition succeeded, the two competitors, both listed on the Hong Kong stock market and controlled by the larger Legend Group, could find a way to detour the current laws and regulations barring overseas funds from entering China's A-share market.
The report said the final decision could be up to Liu Chuanzhi�� Legend Group's chairman of board, who may request both companies to present their purchase scheme and plan in the future for a fair competition.
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