The total amount offered this year to buy out U.S.-traded Chinese companies rose to a record $23 billion as Vimicro International Corp. and China Information Technology Inc. were the latest to receive going-private bids.
Vimicro, a video-surveillance technology supplier, and Internet advertising specialist China Information brought the number of bids this quarter to 19. The total amount offered in 2015 has already surpassed the annual totals in each of the past 12 years, data compiled by Bloomberg show. The trend is being driven by surging valuations in mainland China and the government’s pledge to make it easy to list on local exchanges.
“You’re getting very high valuations in the onshore market in the short term, but things can change dramatically as we’ve seen in the last two weeks,” Brendan Ahern, chief investment officer at Krane Fund Advisors LLC in New York, said by phone on Monday.
The Shanghai Composite Index had more than doubled over the past year before tumbling 13 percent last week, cutting its rally in 2015 to 38 percent. A Bloomberg gauge of the most-traded Chinese companies in the U.S. has climbed 23 percent in 2015. Mainland Chinese stocks on average trade about 241 times reported earnings, compared with a multiple of 17 for their peers listed in the U.S.
China Information jumped 11 percent to $3.73 on Monday in New York after its chairman offered to buy out shareholders for $4.43. Vimicro slipped 1.9 percent to $12.10 after its top executive proposed a buyout at $13.50. The Bloomberg gauge of U.S.-traded Chinese stocks slumped 0.6 percent.
Vimicro sold American depositary receipts for $10 each in its 2005 U.S. debut. The company has a market value of about $283 million.
China Information, which started trading on the Nasdaq Stock Exchange in 2008, last raised funds in May by selling shares for $6.44 apiece. It has a market value of about $130 million.