Xinhua Finance Media, the China-based company that went public earlier this year and is the parent of U.S. news service Market News International, has had Yucaipa Cos. purchase a stake in the company from insiders, according to a story in the Wall Street Journal.
James Areddy, David Reilly and Joanne Lublin wrote, “Investors interpreted the emergence of Yucaipa as a vote of confidence in the Xinhua Finance group and Chief Executive Loretta Fredy Bush. In recent months, Ms. Bush has tried to deflect allegations of self-dealing and links with businesspeople with checkered pasts. Company shares had plunged to record lows, and Ms. Bush has been hit with investor lawsuits and staff defections. Ms. Bush was featured in a page-one article in The Wall Street Journal on July 7.
“Xinhua Finance Media’s American depositary receipts rose 90 cents, or 11%, to $8.78 in 4 p.m. Nasdaq Stock Market composite trading yesterday. That followed a 50% increase in the stock in the four prior days. The shares remain below the company’s March offering price of $13, however. The size, scope and timing of Yucaipa’s investment weren’t clear, and it appeared that money will flow to selling shareholders rather than to the company.
“Xinhua Finance Media said in a statement that the appointment of David Olson, a Yucaipa partner, as an independent director would strengthen its corporate governance. Yucaipa, which is run by Los Angeles billionaire Ronald Burkle, counts former President Clinton as a partner. A Yucaipa spokesman declined to comment. The recent decline in Xinhua Finance’s shares offers Yucaipa exposure to China, a hot investment theme, at a lower price than just a few months ago.”
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