21Vianet Group Inc. surged the most in eight months in New York after the Chinese data-center operator said a buyout group led by its chief executive officer offered to take the company private.
The American depositary receipts advanced 9.7 percent on Wednesday to $21.85, the highest close since Nov. 4. The offer of $23 per ADR from a group including CEO Josh Chen, Kingsoft Corp. and Tsinghua Unigroup International Co. represents a 16 percent premium over Tuesday’s closing level. Trading volume of 4 million shares was five times the full-day average of the past three months.
Beijing-based 21Vianet, which in December got $296 million from a group of investors including software developer Kingsoft and Singapore’s Temasek Holdings Pte Ltd., received the going-private proposal after its share price had slumped 27 percent over the previous 12 months. The company joined Renren Inc. and E-House China Holdings Ltd. this week in announcing bids from private buyers as a world-beating rally in mainland-traded Chinese equities has boosted valuations of their peers on domestic exchanges.
“21Vianet was undervalued” after it was targeted by short sellers last year, Cheng Cheng, an analyst at Pacific Crest Securities LLC, said by phone Wednesday. “You’ve seen companies that feel they’re unloved or those that have confidence they’ll get higher valuations in China looking for going private and relisting in the domestic market.”
21Vianet was accused by short seller Trinity Research Group in September of overstating its business and using financings and acquisitions to inflate growth, causing the worst selloff since its 2011 listing.
The company’s valuation trails locally-traded peers, putting 21Vianet in an unfavorable position due to higher costs when raising capital, Nomura International (Hong Kong) Ltd. analysts led by Leping Huang wrote in a note Wednesday, adding the deal will go through at a final price of between $23 and $31 per ADR share followed by a relisting in the A-share market.
Tsinghua Unigroup, a unit of state-owned Tsinghua University, said on Tuesday it invested $124 million in 500.com Ltd., an online sports lottery operator for a 15.2 percent stake.
The Bloomberg China-US index for the most-traded Chinese companies in the U.S. climbed 1.6 percent to 137 after a two-day slump.
Renren received an offer on Wednesday from its CEO Joseph Chen and Chief Operating Officer James Jian Liu to take the Chinese social networking website private for $4.20 per ADR. The shares retreated 2.9 percent to $3.99 in New York trading.
LightInTheBox Holding Co. rose 2.7 percent to $5.28. The e-commerce operator, which sells Chinese-made goods to customers overseas, said Zhejiang Aokang Shoes Co. has agreed to purchase more than a quarter of the company’s equity at a premium to Tuesday’s closing price.
The iShares China Large-Cap ETF, the largest Chinese ETF in the U.S. tracking Hong Kong shares, sank 0.9 percent to a two-month low of $48.27, while the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF added 0.8 percent to $54.12.