AirMedia Group Inc. rose a record 43 percent after the operator of digital advertising networks said its top executive offered to buy out shareholders, joining a growing number of U.S.-traded Chinese companies seeking to go private.
A group led by Chairman and Chief Executive Officer Herman Man Guo proposed to pay $6 cash per American depositary receipts to acquire all the outstanding equity, the company said in a statement. The offer is a 70 percent premium over Thursday’s closing price of $3.52. The stock surged to $5.02 on Friday in New York in the biggest gain since its November 2007 debut.
Including AirMedia, a record 17 Chinese companies trading in the U.S. have received buyout offers since the start of April as surging valuations in China’s domestic stock markets and the government’s pledge to facilitate the listing of technology firms lure overseas-traded firms back home.
Guo’s group already owns about 38 percent of outstanding shares, according to the statement. The investors plan to fund the deal with a combination of debt, equity capital and rollover equity in the company. The board has formed a special committee consisting of independent directors to evaluate the offer.
AirMedia’s shares had fallen 52 percent from June 14 through Thursday after the company agreed to sell 75 percent of a stake in AM Advertising for 2.1 billion yuan ($338 million) in cash to Beijing Longde Wenchuang Fund Management.