I agree privatization is one of the ways to lose money at current valuations. I disagree there is any danger of a private equity/investment/hedge/micro cap/whatever fund of doing the transaction. Some very good funds have started down that road with XIN and abandon it. To take the same risk others have abandon is not a common Wall Street behavior.
In addition at the current valuation, there is no reason to need a partner in privatizing. Yong can walk across the street to ICBC sign some papers and do it himself. Why share the pie when you are totally capable of eating it all yourself at the same risk level?
The other real risk is a tender. Some competitor will look at the valuation and determine they can buy ready-made risk-free profits using the company as leverage. Good bye XIN.
What we should ask ourselves is why XIN hasn't walked across the street to ICBC to take XIN private yet and why no competitor has tried to make this risk-free profits yet.
When you mentioned many funds have contacted XIN about the privatization, where do you get the information from? If it is from Tom Gurnee's conversation, we shall not take it seriously. I talked to Tom before, and he vaguely told me several PEs contacted him about it last year. I wondered why the company prefers spreading the rumors by its CFO to announcing the offers it received publicly.
(1) They have better things to do.
(2) China's markets are not sophisticated enough.
(3) Many years sitting in the big chair. Even pennies are spinning deals, either being pitched or pitching. About 20 % of a CEO and 5 % of a CFO time is devoted to dealing with deals in a public traded company.
From their recent actions, they intend to go international, so there is no way to go private. Real estate is a capital intensive industry, being in largest capital market in the world is the way to go.