China's Mindray falls as execs reduce their take-private offer

Mindray Medical ($MR) was off in early trading on the news that a management buyout that was first proposed in June now has a reduced price. The latest offer was for $27 per ADS; that's down from the original offer of $30 per ADS.

The decreased offer is due to several factors including ongoing global financial market volatility as well as weaker than expected financials, the potential buyers said in an open letter.

The value of Mindray American depositary shares fell by 2% in early trading on the news to below $24--indicating some Wall Street skepticism about a potential deal. The Wall Street Journal said the new offer would value the company at about $3.2 billion.

The take-private offer is being led by Li Xiting, the executive chairman and co-CEO of Mindray, as well as its co-CEO and CSO Cheng Minghe.

Mindray's take-private deal is one of several similar moves proposed for Chinese companies listed on U.S. markets, including contract research organization WuXi PharaTech and internet service provider Qihoo 360, with an eye toward taking advantage of a hot stock market in China. But the deep losses in recent weeks on the Chinese financial markets may be putting some of these deals in jeopardy.

In addition to the rocky global stock market and the worse than expected Mindray financial performance, the open letter cites the recent devaluation by China of its currency by more than 4% and the expectation that it the Renminbi will continue to lose value against the U.S. dollar--thereby reducing the value of the company and making the deal financing more expensive.

Next, a special committee of the Mindray board will evaluate the revised proposal. The Shenzen-based company is focused on a trio of businesses: patient-monitoring and life support, in-vitro diagnostics as well as medical imaging systems.

- here is the announcement and open letter
- and here is the WSJ coverage