privatization Archives ~ Business China : news for investors in China

BUYOUTS: Autohome, E-House Drive Back to China

By newsdoug on April 18, 2016

Bottom line: Autohome and E-House are both likely to complete their privatizations from New York, continuing the migration of US-listed Chinese firms returning home to seek higher valuations on China’s stock markets.

Autohome drives away from New York

The drive back home for New York-listed Chinese companies continues as we head into the new week, with online car site Autohome (NYSE: ATHM) becoming the latest to announce a privatization plan. In a slightly unusual twist to that story, Autohome shares actually rose above the offer price before the buyout deal was announced, suggesting investors were hoping for a bigger premium than the one offered. But they quickly fell back to the offer price in after-hours trading.

At the same time, online real estate company E-House (NYSE: EJ) announced it has signed a definitive deal to privatize, nearly a year after it first announced its plan to de-list from New York. E-House’s plan has gone down a windy road since it was first announced last June at the height of a rally that saw China’s stock markets more than double in a year. Since then Chinese markets have tanked twice, and are now about 40 percent lower than where they were when E-House first announced its offer. Read Full Post…

BUYOUTS: Qihoo Nears Exit Door, LightInTheBox Gets New Partner

By newsdoug on April 1, 2016

Bottom line: Qihoo’s privatization is likely to succeed after shareholder approval of its buyout offer, though many similar pending deals could collapse and might consider strategic stake sales like the new one by LightInTheBox.

The volume of noise coming from Chinese companies privatizing from New York has dropped sharply in the last month, reflecting volatility in their home market where many hope to one day re-list. But 2 major new stories from that wave are back in the headlines, led by shareholder approval for what would be the biggest privatization so far for security software specialist Qihoo 360 (NYSE: QIHU).

At the same time, the much smaller e-commerce firm LightInTheBox (NYSE: LITB) has just closed another deal that looks less radical than an outright privatization and could provide an alternative template for companies seeking to attract more investor attention. That deal has the company selling 30 percent of itself to Hong Kong-listed Zall Development (HKEx: 2098), which paid a large premium for the stake. Read Full Post…

BUYOUTS: Mindray Defies Buyout Doubters, Shares Jump

By newsdoug on November 5, 2015

Bottom line: Mindray, E-House, Ming Yang and other US-listed Chinese companies that announce revised buyout offers by the end of this month stand a better than 70 percent chance of completing their privatizations.

Mindray shares leap on merger deal signing

After several months of silence, the wave of privatization bids by US-listed Chinese firms earlier this year is suddenly jumping back into the headlines with a series of new developments that indicate the more solid offers will move forward. The latest news has medical device maker Mindray (NYSE: MR) announcing it has just entered into a formal buyout deal, which even includes a price that’s slightly higher than its previous offer.

Mindray’s announcement comes the same week that wind power equipment maker Ming Yang (NYSE: MY) announced its own new privatization bid (previous post), and real estate services company E-House (NYSE: EJ) announced a lower price for its previously announced bid. (previous post) In both of those cases, skeptical investors reacted by dumping shares of both companies, causing them to trade well below the offer price. Read Full Post…

FUND RAISING: Bond Issues Boom at Baidu, Ctrip as Buyouts Pause

By newsdoug on June 26, 2015

Bottom line: Chinese Internet blue chips like Baidu and Ctrip should continue to flourish on Wall Street due to their leading status, while shares of smaller names will sputter and even plunge if a recent wave of buyout offers starts to collapse.

The last 2 days have been most notable for what hasn’t happened over that time, namely the announcement of any new buyout offers for US-listed Chinese companies. Barring any new announcements on this final day of the trading week, the second quarter of 2015 is likely to end with a record 20 such privatization bids for Chinese firms looking to de-list from New York in search of better valuations back in China.

At the same time, 2 of China’s premier US-listed Internet companies are on the cusp of issuing a combined total of nearly $2.5 billion in new bonds, reflecting a new reality for Chinese companies on Wall Street. That reality is allowing China’s leading Internet names like search giant Baidu (Nasdaq: BIDU) and top online travel agent Ctrip (Nasdaq: CTRP) to still do quite well in New York, even as the far bigger number of lesser-known companies see their shares sputter. Read Full Post…

BUYOUTS: Momo Gets Offer, Focus Media Gets More Headaches

By newsdoug on June 24, 2015

Bottom line: Momo’s plan to privatize just 6 months after its IPO could set a new record, while Focus Media’s latest delay in its China re-listing plan should serve as a warning for others considering similar backdoor listings.

The privatization story for US-listed Chinese companies has gained yet another member, with word that social networking app operator Momo (Nasdaq: MOMO) has become the latest name to receive a management-led buyout offer. The offer comes just 6 months after Momo made its trading debut in New York, and if it succeeds Momo could win the new record for a Chinese company with the shortest life as a US-listed company.

It’s worth noting that Momo’s announcement is the only one we’ve seen over the last 24 hours, which perhaps marks a slowdown from the 3 companies that made similar announcements over the long Chinese holiday weekend. (previous post) Many of the firms that are trying to de-list are eying re-listings at home in China, where their shares might be more appreciated by local investors. Read Full Post…

INTERNET: Perfect World Privatizes, Renren Next?

By newsdoug on January 5, 2015

Bottom line: Perfect World’s de-listing plan is likely to succeed and could be followed by a merger with Shanda or Giant Interactive, while Renren is likely to also get bought out and de-list by the end of the year.

Perfect World (Nasdaq: PWRD) has become the latest US-listed online game operator to decide it’s unappreciated by shareholders, announcing a plan to privatize and de-list its shares from New York. The management-led buyout offer shouldn’t come as a surprise, as it follows a steady stream of similar moves that has seen peers like Giant Interactive and Shanda Games (Nasdaq: GAME) also leave or prepare to leave the market.

At the same time, another headline from struggling social networking site (SNS) Renren (NYSE: RENN) is fueling speculation of a similar imminent de-listing. That news has Renren announcing the resignation of its CFO — news which should normally have a neutral to negative effect on the company’s stock. But in this case the stock has jumped on the news, indicating investors may think a buy-out offer is coming. Read Full Post…

Shanda’s Private Ploy: For Real or Market Manipulation? 盛大拟退市：是动真格还是虚晃一枪？

By newsdoug on October 18, 2011

Shanda privatization: sleight of hand to revive shares The big news of the day from the tech world is most certainly the announcement by online game operator Shanda Interactive (Nasdaq: SNDA) that its founder and chairman Chen Tianqiao may take the company private, in the latest development for US-listed China shares that have seen their prices plummet in the last few months amid a broader confidence crisis. (company annoiuncement) The real questions, of course, is whether Chen is really serious, and, if he is, will we see other companies follow his lead as they search for investors who better appreciate their shares. My prediction is that Chen’s offer, which would give shareholders $41.35 per ADS, or a 24 percent premium to their last closing price, is largely a stunt that Chen has no intention of actually executing. The offer is explicitly non-binding, and, in a nod to the market’s skepticism, Shanda’s shares rallied 14 percent after the announcement but still finished on Monday at $38.33, or well below the privatization offer price. Some Chinese observers said perhaps Chen wants to bring his shares back to China to list in his home market where the company is better known, perhaps on a new international board for overseas-registered firms expected to launch in the next year or so. (Chinese article) This could be a long-term possibility, although Shanda might have to wait a while, as many other bigger-name firms like China Mobile (HKEx: 941; NYSE: CHL), Lenovo (HKEx: 992) and HSBC (HKEx: 0005; London: HSBA) are already cuing to list on this new high-profile international board and will probably be given priority. In addition, there’s no reason that Shanda can’t list its shares both in the US and China at the same time, which makes a privatization of its US shares even less necessary. At the end of the day, Chen loves the spotlight and any privatization would move his company back into the shadows for a while, which he would no doubt dislike. Instead, this latest move to privatize looks largely like a show, and Shanda and other US-listed China firms will continue to maintain their overseas listings despite current negative sentiment.

Bottom line: A management-led plan to privatize Shanda Interactive is most likely just a stunt that will never happen, and other US-listed China firms are unlikely to follow with similar actions.