After Premier Li Keqiang's call for Chinese firms' privatization and quitting in their U.S. listings, more firms are now getting buyout offers from CEOs. (Photo : Reuters)
YY Inc., a Chinese video streaming site operator, and e-commerce China DangDang Inc., an online retailer, became the latest firms to receive buyout offers from their CEOs on Thursday.
While YY Inc. was offered a deal worth $3.69 billion by its Chairman Jun Lei and CEO David Li, e-commerce China got an agreement offer from CEO Guoqing Li and Chairwoman Peggy Yu worth $7.812 per ADS to the site.
Taking these firms to privatization comes as U.S.-listed Chinese firms have been taking a beating on the bourses for the past weeks, reflecting a decline in stock markets in the country.
YY Inc. and DangDang have experienced a 21.6 and 36.1-percent decline, respectively, since the June 25 market closing.
"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," Henry Go, an analyst at Summit Research, told Reuters.
The $68.5 per ADS offered by Li and Lei to YY Inc. is at a premium of the stock's July 15 closing at 17.4 percent. The two already owns around 35.7 percent of the firm's shares, amounting to about three-quarter of its aggregate voting power.
Meanwhile, the offer to E-commerce China is at a 20 percent premium to its closing price on the same period as YY Inc's. Li and Yu currently have a 35.9 percent share in the company, and an 83.5 percent share on the voting power.
Both firms stated that special committees will be formed to look into their respective offers.
Recently, Chinese Premier Li encouraged firms to come back to China as the government is planning to promote its local listings. Following the call, a number of Chinese companies have received offers to go private and drop their listings in the U.S.
