Chinese online news and social media company Sina said Monday it had received an acquisition proposal which would take the company private after 20 years of trading on the Nasdaq.
Why it matters: Sina is the second Chinese tech company in a month to mull a delisting from US stock exchanges. Chinese online classifieds marketplace 58.com entered a deal to delist from the New York Stock Exchange in June.
Details: New Wave, a British Virgin Islands-based company owned by Sina chairman and CEO Charles Chao, has proposed to acquire all of Sina’s outstanding shares at a price of $41 per share, the company said in a statement on Monday.
- The offer valued the 22-year-old Chinese company at $2.7 billion. Its shares jumped to $40.5 by market close on Monday after closing at $36.7 on Thursday.
- Sina’s board has formed a special committee consisting of three independent directors to evaluate the proposal.
- “The board cautions the company’s shareholders and others considering trading in its securities that the board just received the non-binding proposal letter from New Wave and no decisions have been made with respect to the company’s response to the proposed transaction,” the company said in the statement.
Context: Founded in 1998, Sina started as a news portal that aggregated articles from print-based media. It went public on Nasdaq in 2000, becoming one of the first Chinese tech companies to list in the US.
- In 2009, Sina launched Weibo, a Twitter-like social media platform. The company spun off Weibo and listed its shares on Nasdaq in 2014.
- Revenue for the first quarter of 2020 declined 8% year on year to $435 million while net profits rose to $82.4 million from $33.1 million in the same period last year, according to company filings.
- The privatization trend is just part of a wave of US-listed Chinese tech companies looking beyond listings in the US. In June, gaming giant Netease and e-commerce company JD.com debuted secondary listings on the Hong Kong stock exchange.
- Chinese companies are under increasing scrutiny in the US after beverage chain Luckin’s admission of financial fraud.
- The Trump administration has also threatened to order US markets to delist Chinese firms. The US Senate passed a bill in May that could force foreign companies listed in the US to hand over their audit records, potentially scaring away some Chinese companies.