Lenovo Shares Fall After PE Firms Sell Shares

HONG KONG (Reuters) – China’s Lenovo (0992.HK), the world’s No. 4 PC maker, fell as much as 7 percent on Wednesday after private equity funds, including TPG Inc and General Atlantic LLC, sold shares for $133 million.

The stock fell below the share sales price of HK$3.55 to hit a low of HK$3.41. It regained some ground to HK$3.46 before the lunch break, but was still down 5.5 percent.

“The recent strength of the stock has more or less reflected the recovery story, and the stock was under pressure after the placement,” said Ben Kwong, chief operating officer of KGI Asia.

Shares of Lenovo had surged 73 percent in the year to Tuesday on optimism that the company will be able to bank on its leadership position in China and ride out the current downturn. They beat a 46 percent gain on the blue chip Hang Seng Index .SHI during the same period.

Kwong said the stock has rebounded from its low and that it makes sense for shareholders to take profits.

The buyout firms offered a total of 291.5 million shares at between HK$3.55 and HK$3.57, a term sheet said on Tuesday.

The shares were sold at HK$3.55 each for a total of HK$1.03 billion ($133 million), representing a 3 percent discount to the stock’s close on Tuesday, according to the stock exchange’s trading records.

Lenovo reported a third straight quarterly loss in August and had been worse hit than rivals such as Acer (2353.TW) and HP (HPQ.N) during the downturn because of its reliance on corporate spending, stemming from its purchase of IBM’s (IBM.N) laptop PC arm in 2004.

($1=HK$7.750)

(Reporting by Alison Leung and Clare Jim; Editing by Ken Wills)