going private bids flood in for Chinese stocks# Stock
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June 11, 2015 6:08 PM
Going-Private Bids Flood in for Chinese Firms Languishing on U.S. Exchanges
By KEVIN KINGSBURY
If you’ve been following the M&A news lately, it’s been a case of déjà
vu all over again. And again. And again.
Just since Tuesday morning, four U.S.-listed Chinese companies have issued
statements about takeover approaches. All four have involved management
buyout offers. And all four used identical language in their headlines,
describing a “preliminary non-binding ‘going private’ proposal.”
Joseph Chen, chairman and CEO of Renren, is offering to take the company
private.
Bloomberg News
Last week, three other Chinese companies trading on U.S. exchanges revealed
similar offers. All three used the phrase “… announces receipt of ‘Going
Private’ proposal” in their headlines.
Last week’s news came from JA Solar Holdings, Taomee Holdings and Mindray
Medical International This week’s came from Homeinns Hotel Group, 21Vianet
Group, Renren and E-House Holdings
Add it all together and it reveals a full-out run of attempts by company
officials to buy the companies they work for or serve on the board of. The
seven proposals in June outnumber the five approaches of U.S-listed Chinese
firms from January to May of this year, according to Deal Point Data. Of the
five earlier approaches, three were management-led.
[RELATED: China’s Hot Stock Market Beckons Chinese Firms Home]
So why has there been such a pickup this month?
Perhaps because the American depositary shares of most of these companies (
with the exception of Renren) continue to trade well below recent highs. And
that’s as the Chinese stock market has been surging, with the Shanghai
Composite Index up 58% this year. Management looking to scoop up companies
amid what officials feel is investor disrespect has long been seen in the U.
S. Now, it would seem executives overseas are taking from that playbook
before any potential price rebound in the ADS.
Whether the companies’ boards ultimately reach agreement with their suitors
remains to be seen, and the process has often proven to be drawn out—
sometimes over a year-plus. So investors buying these potential buyouts may
need to show patience. Of the 5 companies who had disclosed approaches
before this month, three have so far reached a deal—two of them (China
Mobile Games and Entertainment Group Ltd. and Sungy Mobile) this week.
Going-Private Bids Flood in for Chinese Firms Languishing on U.S. Exchanges
By KEVIN KINGSBURY
If you’ve been following the M&A news lately, it’s been a case of déjà
vu all over again. And again. And again.
Just since Tuesday morning, four U.S.-listed Chinese companies have issued
statements about takeover approaches. All four have involved management
buyout offers. And all four used identical language in their headlines,
describing a “preliminary non-binding ‘going private’ proposal.”
Joseph Chen, chairman and CEO of Renren, is offering to take the company
private.
Bloomberg News
Last week, three other Chinese companies trading on U.S. exchanges revealed
similar offers. All three used the phrase “… announces receipt of ‘Going
Private’ proposal” in their headlines.
Last week’s news came from JA Solar Holdings, Taomee Holdings and Mindray
Medical International This week’s came from Homeinns Hotel Group, 21Vianet
Group, Renren and E-House Holdings
Add it all together and it reveals a full-out run of attempts by company
officials to buy the companies they work for or serve on the board of. The
seven proposals in June outnumber the five approaches of U.S-listed Chinese
firms from January to May of this year, according to Deal Point Data. Of the
five earlier approaches, three were management-led.
[RELATED: China’s Hot Stock Market Beckons Chinese Firms Home]
So why has there been such a pickup this month?
Perhaps because the American depositary shares of most of these companies (
with the exception of Renren) continue to trade well below recent highs. And
that’s as the Chinese stock market has been surging, with the Shanghai
Composite Index up 58% this year. Management looking to scoop up companies
amid what officials feel is investor disrespect has long been seen in the U.
S. Now, it would seem executives overseas are taking from that playbook
before any potential price rebound in the ADS.
Whether the companies’ boards ultimately reach agreement with their suitors
remains to be seen, and the process has often proven to be drawn out—
sometimes over a year-plus. So investors buying these potential buyouts may
need to show patience. Of the 5 companies who had disclosed approaches
before this month, three have so far reached a deal—two of them (China
Mobile Games and Entertainment Group Ltd. and Sungy Mobile) this week.