PRIVATISATION

Dangdang, 'China's Amazon', and YY receive privatisation offers from executives

PUBLISHED : Friday, 10 July, 2015, 8:56am
UPDATED : Tuesday, 25 August, 2015, 10:26am

Chinese e-commerce firm Dangdang has received a buyout offer from executives, the company said on Thursday, the latest in a series of Chinese businesses to discuss privatisation.

According to a statement, the buyout group includes board chairwoman Peggy Yu Yu and chief executive Guoqing Li. Both executives are already major shareholders in the company. The transaction would value the New York-listed Dangdang at about US$630 million.

Yu and Li offered US$7.812 in cash per American depositary, a 20 per cent premium on the most recent trading price.

Also receiving a privatisation offer this week was social messaging and video platform YY. Chairman Jun Lei and chief executive David Xueling Li proposed to buy all remaining shares they didn't control for US$68.50 per American depository share.

The deal would value YY at around US$3.7 billion.

Both offers come after a host of similar proposals involving Chinese companies, including JA Solar Holdings, 21Vianet Group, and Renren, or "China's Facebook".

US-listed Chinese firms have been involved in far more going private offers this quarter compared to the first part of 2015, when five approaches were made, according to Deal Point Data.

Tumultuous activity in the Chinese stock markets in recent weeks has also had an effect on those firms listed in the US. On Monday, a number of Chinese firms, including Weibo and Xunlei, saw their fortunes dip as the Bloomberg China-US Equity Index took its biggest hit in four years.

The rout back in China, where around US$3 trillion has been wiped out in three weeks, has dashed the hopes of many firms to delist from American exchanges and move back home. Beijing suspended initial public offerings (IPOs) in an apparent attempt to halt the influx of new equity and underpin stocks, which have endured a brutal recent sell-off.