Chinese e-commerce giant Dangdang receives management buyout offer
10 July 2015
Chinese e-commerce firm Dangdang had received a buyout offer from executives, the company said today.
According to a statement, the buyout group included board chairwoman Peggy Yu Yu and chief executive Guoqing Li, both already major shareholders in the company.
The transaction would see the New York-listed Dangdang valued at about $630 million.
The offer from Yu and Li at $7.812 in cash per American depositary, worked out to a 20-per cent premium on the most recent trading price.
Another company to receive a similar offer was social messaging and video platform YY.
YY chairman Jun Lei and chief executive David Xueling Li proposed the acquisition of all remaining shares they did not control for $68.50 per American depository share.
The deal would value YY at around $3.7 billion.
Both offers come after similar proposals involving Chinese companies, including JA Solar Holdings, 21Vianet Group, and Renren, or "China's Facebook".
US-listed Chinese firms had been involved in far more 'going private' offers this quarter as against the first part of 2015, when five approaches were made, Deal Point Data reported.
Volatitlity in the Chinese stock markets in recent weeks had also had an effect on those firms listed in the US. A number of Chinese firms on Monday including Weibo and Xunlei, took hits as the Bloomberg China-US Equity Index plunged the most in four years.
Both Dangdang and YY stocks fell 36.1 per cent and 21.6 per cent, respectively, since markets closed on 25 June.
"The two stocks got hammered over the past several sessions, so I think management believes the price is low so they take this opportunity to offer a private proposal," Summit Research analyst Henry Guo told Reuters.
A number of Chinese tech companies had received proposals to drop their US listings and go private after Chinese premier Li Keqiang encouraged companies to return to China under a plan to promote domestic listings.
Tech executives at several Chinese companies are looking at higher valuations back home.