An investor in the consortium bidding out to take Qihoo 360 Technology Co. private has said that the Chinese Internet security-services firm’s $9 billion plan to go private would be beneficial to its business, the Wall Street Journal reported.
Bao Fan, chief executive of China Renaissance, one of the investors in the Qihoo buyout bid, made this remark at the Converge technology conference on Thursday, July 30.
"Qihoo's main business is network security, so being a Cayman company listed in the U.S. doesn't fit them very well," Bao said. "For them, coming back to be a domestically listed company actually helps them business-wise."
According to the report, China Renaissance, Sequoia Capital China and Citic Securities Co. are among the investors joining Qihoo's chairman Zhou Hongyi in a buyout group which seeks to take the company private for $9 billion, or $77 per share.
The report said that investors were not convinced about the Qihoo privatization bid, causing the stock trading to drop below $63 on Wednesday, July 29, which was below the nonbinding offer price.
Bao said on the sidelines of Converge conference that once the suspension on initial public offerings is lifted, Qihoo should be among the first companies to be listed in China.
He said that Qihoo is profitable and enjoys a good relationship with the Chinese government, which has been investing heavily in network security, where Qihoo is an industry leader.
Bao added that if the company's privatization plan pushes through and Qihoo relists in China, it would be the biggest Internet company listed domestically in terms of market valuation, which fund managers can include in their portfolio.