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Xinyuan Real Estate Co., Ltd. Message Board

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  • stan.ackman stan.ackman Oct 15, 2012 3:55 PM Flag

    My 2 Cents on XIN's Privatalizaiton

    Casey-

    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.

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    • (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.

      • 2 Replies to wkao2
      • Wkao2-

        That's incorrect to say there is no way to go private because they intend to go international. We see many private companies with much bigger global business. It is true a NYSE label has positive impact on XIN's business, but the impact is a marginal one. It's not enough to compensate the costs to be a NYSE listed public companies.

        You are right real estate is a capital intensive industry. However, XIN virtually could not get any significant capital from this price level. What it does is actually returning capital to its shareholders.

      • There are thousands of ways to go private. Capital intensive companies are usually ripe targets to flip.

 
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