recently stated that they own 29.6% of Tarena International, Inc. (NASDAQ:TEDU) in a Form 13D/A disclosure that was filed with the SEC on Friday, October 13th. The investor owns 17,050,297 shares of the stock valued at $243,307,738. The reporting parties listed on the disclosure included Shaoyun Han, Connion Capital Limited, Learningon Limited and Techedu Limited. The disclosure is available through the SEC website at this hyperlink.
provided the following explanation of their ownership:
Paragraph 2 of Item 4 of the Schedule 13D is hereby amended and restated as follows:
Pursuant the CBPA, only for so long as KKR and KKR Affiliate hold not less than 4,195,662 Ordinary Shares and Moocon has not redeemed the Bond in full, without the approval of KKR, neither Mr. Han nor his subsidiaries (including Moocon) shall agree to have the Company or its subsidiaries to take any of the following actions:
(i) issue any securities of any type or class, carry out any equity financing or undertake any obligation in relation to any of the above, other than (a) any grant or exercise of sharebased awards pursuant to any existing share incentive plan of the Company, (b) any issuance of Class A Ordinary Shares upon the conversion of Class B Ordinary Shares and (c) any issuance of equity security in connection with any share dividend, subdivision, combination or reclassification of capital stock in which all shareholders of the Company are entitled to participate on a pro rata basis;
(ii) merge, amalgamate or reorganization, or acquisition, in each case exceeding US$10 million, or take any action which would result in a change of control or a transfer of its asset the value of which is US$10 million or more;
(iii) carry out business other than education business in its nature; or
(iv) delist or change its listing place, or take any other actions which may affect the liquidity of KKR and KKR Affiliate’s investment contemplated under the SPAs and other agreements relating to this transaction, provided that KKR and KKR Affiliate shall provide support if the Company intends to list its shares or its subsidiary’s shares in a stock exchange located in the People’s Republic of China.
Upon the completion of the Redemption on October 10,2017, Moocon has redeemed the Bond in full and therefore, the obligations of Mr. Han and his subsidiaries (including Moocon) under this provision have been terminated.
Paragraph 5 of Item 4 of the Schedule 13D is hereby amended and restated as follows:
Pursuant to the CBPA, only for so long as (i) KKR and KKR Affiliate hold not less than 3,413,132 shares of the Company and (ii) Moocon has not redeemed the Bond in full, Mr.Han shall use his commercially reasonable efforts to cause the Company to distribute not less than 2535% of its annual net income to its shareholders in each year. Upon the completion of the Redemption on October 10,2017, Moocon has redeemed the Bond in full and therefore, the obligations of Mr. Han under this provision have been terminated.
A number of other institutional investors and hedge funds have also modified their holdings of the business. UBS Group AG grew its stake in shares of Tarena International by 137.2% during the 1st quarter. UBS Group AG now owns 6,553 shares of the business services provider’s stock valued at $122,000 after buying an additional 3,790 shares during the period. Dupont Capital Management Corp grew its stake in shares of Tarena International by 23.7% during the 2nd quarter. Dupont Capital Management Corp now owns 9,897 shares of the business services provider’s stock valued at $177,000 after buying an additional 1,897 shares during the period. Westpac Banking Corp purchased a new stake in shares of Tarena International during the 1st quarter valued at $235,000. KCG Holdings Inc. purchased a new stake in shares of Tarena International during the 1st quarter valued at $266,000. Finally, Citadel Advisors LLC purchased a new stake in shares of Tarena International during the 1st quarter valued at $268,000. Institutional investors own 36.63% of the company’s stock.
Tarena International (NASDAQ:TEDU) last announced its quarterly earnings results on Monday, August 21st. The business services provider reported $0.09 EPS for the quarter, missing the Thomson Reuters’ consensus estimate of $0.16 by ($0.07). Tarena International had a return on equity of 15.30% and a net margin of 13.74%. The business had revenue of $66.43 million for the quarter.
Tarena International declared that its Board of Directors has approved a stock buyback program on Monday, August 21st that allows the company to buyback $30.00 million in outstanding shares. This buyback authorization allows the business services provider to reacquire shares of its stock through open market purchases. Stock buyback programs are generally an indication that the company’s leadership believes its stock is undervalued.
Several brokerages have recently issued reports on TEDU. Zacks Investment Research cut shares of Tarena International from a “buy” rating to a “hold” rating in a research note on Wednesday, July 26th. BidaskClub cut shares of Tarena International from a “buy” rating to a “hold” rating in a research note on Tuesday, July 25th. Jefferies Group LLC reissued a “buy” rating and set a $21.50 price objective on shares of Tarena International in a research note on Tuesday, August 29th. Instinet cut shares of Tarena International from a “buy” rating to a “neutral” rating and lowered their price objective for the company from $22.50 to $19.50 in a research note on Tuesday, August 22nd. Finally, Nomura reissued a “neutral” rating on shares of Tarena International in a research note on Tuesday, August 22nd. Two investment analysts have rated the stock with a sell rating, four have assigned a hold rating and two have assigned a buy rating to the company’s stock. Tarena International presently has an average rating of “Hold” and an average target price of $20.10.
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About Tarena International
Tarena International, Inc (Tarena International) is a holding company. The Company, through its subsidiaries, provides professional education services, including professional information technology (IT) training courses and non-IT training courses across the People’s Republic of China (PRC). It operates through training segment.
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