- Trading volume surges to almost 9 times three-month average
- Offer is part of a record wave of going-private proposals
Zhaopin Ltd. rallied the most since January as Sequoia China Investment Management joined the Chinese online employment recruiter’s management to take the company private in a bid that exceeded a previous offer.
The American depositary receipts jumped 7.6 percent to $16.05 on Thursday in New York. Trading volume of about 600,000 shares was almost nine times the daily average of the past three months. It was the best performance in the Bloomberg-China Equity Index, which rose 0.2 percent.
Zhaopin rose as senior managers including Chief Executive Officer Evan Sheng Guo and Sequoia offered $17.75 per ADR to take it private. That’s a 14 percent premium to the average price over the last 90 trading days and 25 cents more than a prior offer received in January. It’s among a record 42 Chinese companies that have announced plans to delist from U.S. markets as they seek potentially higher valuations either on the mainland or in Hong Kong. Only 13 have completed transactions in the period. Some have slumped on concern the government may curb such deals to support the existing market.
“Investors are worried that some of these deals may not go through,” Jun Zhang, head of China research at Rosenblatt Securities Inc., said by phone from San Francisco. “But it’s very unlikely that the Chinese government will shut the door on those re-listings completely.”
Momo Inc., the Chinese dating app maker that got a boost last month when an Alibaba Holding Group Ltd.’s finance affiliates joined the group seeking to buy it out, fell as much as 16 percent on Thursday, the most since its 2014 initial public offering. YY Inc., also a buyout target, slid as much as 5.3 percent.
Sequoia is involved in a number of Chinese buyout deals including Momo, Qihoo 360 Technology Co. and Jumei International Holdings Ltd.