Big player

Hong Kong, May 30 (Reuters): Lenovo Group Ltd has tweaked a deal with IBM to allow the US company to sell its nearly 15 per cent stake in China’s top personal computer maker by November 2007, six months earlier than agreed.

Under the amended deal, IBM could also sell up to two-thirds of its 1.3 billion shares in Lenovo from May 25, 2006 ? twice the amount originally agreed upon, the Chinese company said in a statement.

IBM would then be allowed to offload its remaining one-third stake from November 1, 2007.

But analysts say IBM is unlikely to dump its slice of Lenovo immediately, with shares of China’s largest PC maker hovering below IBM’s entry level of about HK$2.675. “The stock is oversold. I expect IBM will not offload its stakes at a price below its entry level. I do not see a great selling pressure,” said Morgan Stanley analyst Viktor Ma.

Shares in Lenovo had risen more than 3 per cent before ending Tuesday up 1 per cent at HK$2.35, outperforming a 0.66 per cent dip in the broader market. Analysts said the rise in Lenovo’s stock price was unrelated to the new agreement.

“The stock price bottomed when Lenovo announced its result last week. The worst is over,” said Core Pacific Yamaichi analyst Pauline Lau.