(Yicai Global) Oct. 28 -- Shares in Meinian Onehealth Healthcare Holdings surged by the 10 percent daily limit today on news that affiliates of tech giant Alibaba Group Holding would invest CNY7.3 billion (USD1 billion) in the Chinese medical service provider.
The Shanghai-based firm's stock [SHE:002044] opened at CNY14.97 (USD2.12) and stayed there for most of the morning session.
Alibaba China Network Technology, another Alibaba affiliate and concerted individuals penned a deal to buy 16.2 percent of Meinian from its controlling shareholder Shanghai Tianyi Asset Management yesterday, the seller said in a statement the same day. The buyers will pay CNY12.01 (USD1.70) a share, some 12 percent less than Meinian's CNY13.61 closing price on Oct. 25.
Yu Rong will remain Meinian's actual controller, though the stake he holds in concert with other individuals will decline to 22.9 percent from 37.6 percent.
The investment is Alibaba's second major injection into a healthcare company this year after its investment arm and founder Jack Ma's private equity firm Yunfeng Capital led the USD1.4 billion privatization of the then Nasdaq-listed iKang Healthcare Group, which specializes in health examinations.
The move is conducive to Meinian's long-term stable development as it will help improve its smart technologies and create a platform for collaborative innovation, the statement added.
Editor: James Boynton