Bottom line: Qihoo is likely to complete its $9 billion privatization in the next few months at its original bid price, while Jiayuan’s buyer may have to raise its price again to placate unhappy shareholders.
Qihoo buyout advances, Jiayuan hits resistance
The year of the buyout for US-listed Chinese firms is ending on a loud note, with announcement of a formal privatization offer for security software specialist Qihoo 360 (NYSE: QIHU), the largest of the deals among the 3 dozen announced in 2015. But while Qihoo’s plan moves ahead, another older deal to buy out online dating site Jiayuan (Nasdaq: DATE) is running into trouble due to complaints about its low valuation. In the latest development on that front, a major third-party advisory service has recommended that shareholders reject the offer because it’s too low.
Last but not least, I’ll end this buy-out round-up with some whimsical speculation that Phoenix New Media (NYSE: FENG) may be next to receive a privatization offer. My speculation isn’t based on any insider information, but rather the simple fact that the company’s stock jumped 14 percent on Friday for no apparent reason. The company also looks similar to many of the others that have already received similar offers. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 19-21. To view a full article or story, click on the link next to the headline.
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Apple (Nasdaq: AAPL), Samsung to Enter China Payments Market With UnionPay (English article)
Qihoo 360 (NYSE: QIHU) Enters into Definitive Agreement for Going Private (PRNewswire)
Microsoft (Nasdaq: MSFT) Unveils Plans for China Joint Venture (English article)
Amazon (Nasdaq: AMZN), Oriental Pearl in Cloud Computing Partnership (Chinese article)
BOCI (HKEx: 3988) Sells Nanyang Commercial Bank to Cinda for HK$68 Bln (HKEx announcement)
The following press releases and media reports about Chinese companies were carried on December 10. To view a full article or story, click on the link next to the headline.
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Yahoo (Nasdaq: YHOO) Reverses Plan to Spin Off Alibaba (NYSE: BABA) Stake (English article)
Wal-Mart’s (NYSE: WMT) China Imports Cost 400,000 US Jobs in 2001-2013: Report (English article)
President to Buy Qihoo 360’s (NYSE: QIHU) Enterprise Security Business – Source (English article)
Didi Kuaidi Appoints Yahoo (Nasdaq: YHOO) Co-Founder Jerry Yang as Adviser (English article)
Alibaba (NYSE: BABA) E-Auto to Become Presenting Partner of FIFA Club World Cup (Businesswire)
Bottom line: Google’s registration of a company in Shanghai’s Free Trade Zone is the latest incremental move in its crawl back to China, but the company will focus on apps and is unlikely to re-enter the sensitive Chinese search market.
Google searches for China opening in Shanghai
What’s becoming one of the slowest homecomings of all time has just taken another small but significant step forward, with reports that US Internet titan Google (Nasdaq: GOOG) has formally registered a new company in a 2-year-old Free Trade Zone (FTZ) in Shanghai. The move had Chinese media buzzing about an imminent return to China by Google, nearly 6 years after the company shuttered its local search service after a high-profile dispute with Beijing over censorship.
Like many of the earlier reports, this latest report looks mostly incremental and doesn’t seem to portend any imminent announcements by Google. But the reports do contain a couple of interesting developments that could hint at how the company plans to do business in the world’s largest Internet market if and when it does return. The 2 key new elements are Google’s potential choice of Shanghai for its new China base, and its registration of a new search and email services company to be run under the separate name Pengji. Read Full Post…
Bottom line: Domestic private equity is fueling a sudden resurgence in privatizations of US-listed Chinese firms, with a flurry of new deals likely to come after the signings of new buyout offers for Homeinns and Jiayuan.
Homeinns, Jiayuan move closer to US de-listings
Two companies looking to de-list their shares from New York and re-list back in China have taken major steps forward, with hotel operator Homeinns (Nasdaq: HMIN) and online dating site Jiayuan (Nasdaq: DATE) both announcing they have signed formal buyout offers to privatize. In an interesting twist to the privatization story that has seen dozens of US-listed Chinese firms announce similar plans, Homeinns and Jiayuan are both being purchased by China-listed firms as part of their buyout deals.
That means that once the buyouts are consummated, both Homeinns and Jiayuan will immediately become publicly listed in China. Such a development would mark a rapid shortening of the time these companies would need to return to Chinese stock markets from the US. In the past, the small number of similar migrations was typically taking 2 years or more to complete. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 2. To view a full article or story, click on the link next to the headline.
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Qihoo 360 (NYSE: QIHU) May Reach Buyout Deal Within Weeks – Source (Chinese article)
Manchester City Group Sells 13 Pct to Chinese Investors for $400 Mln (English article)
CMGE Seeks Relisting in China Months After Dropping From Nasdaq (English article)
Alibaba (NYSE: BABA Appoints Leaders to Run France, Germany Operations (Businesswire)
Fosun Pharma (Shanghai: 600196) Buys $65 Mln Stake in Online Health Firm Guahao (English article)
Bottom line: New York has lost its appeal for listings by smaller Chinese Internet companies, but should remain attractive for sector leaders like Didi Kuaidi and Meituan-Dianping.
Chinese NY IPOs shrink sharply in 2015
China’s imminent resumption of IPOs after a 4-month pause seems like a good opportunity to review what’s shaping up as the year of the “reverse IPO” in New York by Chinese companies. Market watchers will know that I’m talking about this year’s record wave of privatization bids by US-listed Chinese firms, which saw around 3 dozen companies announce plans to de-list from New York during the year with an eye to re-listing back in China.
That’s not to say that no Chinese companies listed in New York this year, and I was able to track down at least 4 that made such offers. But those 4 collectively raised a paltry $200 million, or just a tiny fraction of the nearly $30 billion that Chinese companies raised in a record year for New York IPOs in 2014. Read Full Post…
Bottom line: Alibaba and Baidu’s inclusion in MSCI indexes and SouFun’s new dual listing in China highlight reasons why overseas markets are still an attractive place for leading private Chinese companies to list.
SouFun eyes dual listings in China, NY
Two new developments last week highlighted why overseas listings are still beneficial and even desirable for some Chinese companies, even as a flood of New York-listed firms move ahead with plans to leave New York and re-list in China.
The first development saw MSCI, one of the world’s top index compilers, say it would include Chinese companies in its products for the first time by choosing several US-listed firms, including Internet titans Alibaba(NYSE: BABA) and Baidu (Nasdaq: BIDU). The second saw investors applaud a plan by leading online real estate services firm SouFun (NYSE: SFUN) to take control of a Shanghai-listed company, a move designed to gain access to Chinese capital markets while maintaining its New York listing. Read Full Post…
Bottom line: Giant Interactive is likely to achieve a backdoor listing in China over the next 12 months, while Qihoo could receive a new, lowered privatization offer by the end of this year.
Giant eyes China backdoor listing
Early signs of stabilizing on China’s stock markets are breathing new life into the nascent migration by Chinese tech firms that are abandoning overseas listings to re-list back at home. The latest signals of new movement are coming from formerly New York-listed Giant Interactive, which is eyeing a backdoor listing in Shenzhen, and from Qihoo 360 (NYSE: QIHU), which is indicating its faltering plan to de-list from New York is still alive.
Both of these deals have a bit of history, and are part of a broader wave that saw 3 dozen US-listed Chinese firms announce plans to privatize in the first half of this year. Most of those plans came when China’s domestic stock markets were rallying sharply. Backers of the bids were betting that companies whose shares had languished in New York could get much higher valuations from investors in their home China market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 9. To view a full article or story, click on the link next to the headline.
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China RE Sets Price Range for $2 Bln HK IPO; to Launch Deal Monday – Source (English article)
Bottom line: Microsoft’s new tie-up with Baidu could presage a major scale-back for its China-based Bing search engine, paving the way for Baidu technology to power the struggling service.
Microsoft, Baidu in new China search tie-up
An interesting new dance is taking shape between global software titan Microsoft (Nasdaq: MSFT) and leading Chinese search engine Baidu (Nasdaq: BIDU), paving the way for a potential exit of Microsoft’s Bing search engine from China after years of disappointing results. After announcing a new tie-up that will see Baidu promote Microsoft’s upcoming Windows 10 operating system in China, the pair are saying said that Baidu will now become the default search engine on the web browser associated with the newest Windows.
Microsoft will clearly benefit from the first move, which should help it to sell more legal copies of its core Windows OS in China. Baidu is the clear beneficiary from the second move, making this look somewhat like an even trade-off. But while the first move is relatively neutral to Baidu, the second will see Microsoft effectively sacrifice Bing in China. That’s because very few people use the search engine, and now that number will drop even more if Bing loses its default status on the new Windows browser. Read Full Post…
