By Wang Lan (China Daily)
Updated: 2008-01-16 10:25

Washing machine manufacturer Little Swan Co said yesterday its controlling shareholder Wuxi Guolian Development Group plans to sell its 24.01 percent stake in the company to the highest bidder.

State-owned firm Wuxi Guolian did not say why it wants to sell its entire shareholding in Little Swan, based in Wuxi, Jiangsu Province. A Wuxi Guolian spokesman confirmed the company's board of directors had decided to sell the stake, but refused to elaborate.

Little Swan's shares have been suspended for trading since Monday. The Wuxi Guolian stake in Little Swan is valued at about 1.9 billion yuan at last Friday's closing price of 21.9 yuan.

Little Swan said in a statement to the Shenzhen Stock Exchange that Wuxi Guolian had put its entire holding of 87.6 million Little Swan shares up for sale.

Several major home appliance producers are reported to have shown interest in Little Swan to expand their customer base.

He Kesi, spokesman for Sichuan Changhong Group, the country's leading electrical appliance maker, told China Daily the company would not rule out buying a controlling stake in Little Swan. But, "we haven't got a concrete acquisition plan yet", he said.

Midea Group, another appliance producer widely seen as a potential bidder, was not available for comment.

Little Swan was third after Royalstar and Haier in Gome's washing machine sales in December, according to China Industrial Research Net. Gome is a leading home electronics retail chain in China.

Shi Hong, an analyst at Industrial Securities in Shanghai, said the industry trend is to gain market share through mergers and acquisitions, combining the strength of former rivals.

"Little Swan's stable and broad customer base established over many years is what's most attractive to buyers," said Shi.