Bottom line: Autohome’s shares will come under pressure after a mass defection of its middle management, most likely to start a rival company, while Ku6 is likely to close shop within the next 2 years following its de-listing from New York.
Mid-level managers leave Autohome en masse
A couple of new twists are bubbling through the headlines in a wave of buyout offers for US-listed Chinese companies, led by the latest signs that a privatization for online car site Autohome (NYSE: ATHM) is effectively dead. Those signs are coming in reports of a wave of resignations by mid-level company executives, following a failed management-led buyout bid. Meantime, online media site Ku6 Media (Nasdaq: KUTV) has formally completed its own buyout offer, meaning this insignificant player that was once a leader in China’s new media space will probably de-list very soon and could disappear completely within the next 2 years. Read Full Post…
Bottom line: Autohome’s attempt at a management-led buyout failed due to difficulties financing such a large deal, and Qihoo’s new attempt to finance its buyout with crowd funding-style tactics points to similar problems.
Ping An takes over Autohome boardroom
New developments in 2 of the biggest privatizations of US-listed Chinese companies are casting a spotlight on the difficulty many of these cases face, especially bigger deals that require billions of dollars in funding to succeed. The first case has the management team at online car specialist Autohome (NYSE: ATHM) losing its battle to take the company private, following a high-profile battle with its largest stakeholder. The second has software security specialist Qihoo 360 (NYSE: QIHU) reportedly turning to crowd funding-style tactics to try and raise money for its own buyout, hinting at financing difficulties for a privatization that values the company at more than $9 billion. Read Full Post…
Bottom line: Qunar looks like the latest Chinese buyout candidate to become involved in a contested bidding war, while Autohome is unlikely to succeed in efforts to stop the sale of a stake in the company by its largest shareholder.
Qunar gets surprise buyout offer
A flurry of headlines from the wave of privatizations by US-listed Chinese companies are in the news as the week winds down, led by word that online travel site Qunar (Nasdaq: QUNR) has become the latest to get a buyout offer. Qunar wasn’t the only one lining up to leave New York, as game specialist Sky-mobi (Nasdaq: MOBI) also announced its own plan to go private. Meantime, a hotly contested privatization by online car specialist Autohome (NYSE: ATHM) has taken a few new twists, and wind power equipment maker Ming Yang (NYSE: MY) says it has just completed its own previously announced privatization. Read Full Post…
Bottom line: Privatization plans by Autohome and iKang will face long delays due to shareholder resistance and rival bids, while Wanda Commercial’s similar buyout will proceed soon after some technical issues are resolved.
Autohome, iKang take buyout clashes to court
Three of the larger privatization bids by offshore-listed Chinese firms are running into snags, hinting at a growing wave of resistance to such offers considered by many as too low and opportunistic. Two of the most colorful tales involve online car site Autohome (NYSE: ATHM) and private clinic operator iKang (Nasdaq: KANG), whose management-led buyout deals both hit snags due to unexpected third-party developments. In the latest twist to those stories, Autohome is now taking legal action to prevent a separate share sale that could kill its own management-led buyout bid; while iKang is playing legal games with a rival bidder that trumped an original management-led buyout plan. Read Full Post…
The following press releases and news reports about China companies were carried on May 27. To view a full article or story, click on the link next to the headline.
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Bottom line: Zhaopin’s slight raising of its privatization price could reflect minority investor complaints about undervaluation, while Autohome’s buyout price could rise up to 20 percent in a game of strategic maneuvering with Ping An.
Zhaopin raises buyout price
Minority investors have long complained that a wave of privatization bids for US-listed Chinese companies are grossly undervalued, and now the companies may finally be responding to those grievances. That’s my assessment based on the latest reports that say online recruitment site Zhaopin (Nasdaq: ZPIN) has quietly raised the bid price for its privatization plan, as valuation questions also threaten to derail a similar plan by online car site Autohome (NYSE: ATHM).
Minority investor complaints about undervaluation center on the fact that top managers often control a majority of their companies’ shares through direct and indirect relationships. That means they can choose whatever bid price they want and be assured of its acceptance at shareholder votes. But threats of lawsuits and rival bids, and also perhaps worries about being seen as greedy and unethical are forcing some of the management-led buyout groups to rethink their prices and offer more. Read Full Post…
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…
A couple of items from China’s booming auto market are shining a spotlight on the sector’s big potential and also the looming risk of a government-led slowdown in a bid to control the nation’s worsening air quality. In the former category, online information provider Autohome has just made its first public filing for a New York IPO, becoming the latest in a sudden burst of tech firms to raise money outside China. The second news bit looks a bit more ominous, with media reporting the city of Beijing is sharply cutting its quota for new car sales in a bid to improve local air quality. That could be the first sign of a looming slowdown for national auto sales if other cities follow suit, which could easily happen. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 1. To view a full article or story, click on the link next to the headline.
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A couple of news bits from the smartphone space are shining a spotlight on 2 very different stories in the sector, with up-and-comer Xiaomi’s young but rapid growth moving ahead, while a struggling much larger ZTE (HKEx: 763) is trying a new approach to win more overseas business. The only common theme to these 2 different stories is the lightning pace of change that has developed in the dynamic smartphone space, where a manufacturer can now go from startup to superstar to laggard status in very short time.
A couple of news bits from the smartphone space are shining a spotlight on 2 very different stories in the sector, with up-and-comer Xiaomi’s young but rapid growth moving ahead, while a struggling much larger ZTE (HKEx: 763) is trying a new approach to win more overseas business. The only common theme to these 2 different stories is the lightning pace of change that has developed in the dynamic smartphone space, where a manufacturer can now go from startup to superstar to laggard status in very short time.
