* Hillhouse, CDH-led group offers HK$6.30/share in Belle
* Hillhouse to own 56.8 pct of Belle after buyout
* Belle has faced tough competition from e-commerce
* Privatisation to free Belle from "short-term
(Adds Belle CEO comments, details on Hillhouse, Belle ownership
HONG KONG, April 28 (Reuters) - A consortium led by private
equity firms Hillhouse Capital Group and CDH Investments offered
on Friday to buy Belle International Holdings Ltd in a
deal valuing the entire Hong Kong-listed shoe retailer at about
The move follows a similar transaction in January, when
e-commerce giant Alibaba Group Holding Ltd led a $2.6
billion bid to privatise department store operator Intime Retail
Group Co Ltd, underscoring the difficulties
traditional retailers are facing from competition with online
Belle, which distributes several sportswear brands including
Nike, Adidas, Puma and Converse,
said in a securities filing it has experienced "unprecedented
challenges," particularly from e-commerce and shopping malls
that compete with its main sales channels in department stores.
"A fundamental transformation is necessary in order for the
company to compete effectively and solidify its long-term
leadership in the Chinese ladies footwear market," CEO Sheng
Baijiao said in the filing.
Hillhouse and CDH joined with Yu Wu and Sheng Fang,
directors at Belle, to offer HK$6.30 per share in the company.
The price is equivalent to a premium of 20 percent from Belle's
closing price before the trading halt and values the company at
HK$53.1 billion ($6.8 billion).
Hillhouse, which has invested in major Chinese internet
companies including Baidu Inc, Tencent Holdings Ltd
and ride-hailing firm Didi Chuxing, will end up owning
56.8 percent of Belle after the deal is completed, with CDH
taking a 12.1 percent stake, according to the filing.
A group of Belle's management, including Yu and Sheng, will
own the remainder 31.1 percent of the company.
Bank of America advised the buying consortium and will
extend HK$28 billion ($3.60 billion) in acquisition financing to
the group to help fund the share purchase.
Chief Executive Sheng and Belle's chairman Tang Yiu have
accepted the offer for their combined 25.8 percent stake.
Sheng said the transformation can be more effectively
implemented if the company is privatised and free from
"short-term distractions arising from the public equities" as it
also involves risks.
Trading of Belle's shares has been halted since April 18 at
the company's request and will resume on Tuesday, after a public
holiday in Hong Kong.
Shares of Belle, which has a market value of $5.7 billion,
gained nearly 21 percent so far this year, reversing a 25
percent slide in 2016.
China's top footwear retailer, which has over 20,000
mainland outlets, had warned in March that it expected to see a
15-25 percent fall in profit when it reports full-year earnings
in May as shifting consumer style preferences put pressure on
its shoe business.
Belle also said adjustments to its share award scheme as
part of an incentive programme to management had led to a
significant increase in expenses.
($1 = 7.7778 Hong Kong dollars)
(Reporting by Elzio Barreto; Editing by Nick Macfie/Keith Weir)