Zhaopin in New Buyout Talks to Take Company Private

(Beijing) — Online recruitment site Zhaopin.com said it is in talks with a consortium led by its largest shareholder to take the company private, marking the third such bid in one of the most contested in a wave of buyouts of U.S.-listed Chinese firms.

Zhaopin said it is in advanced discussions with the group, headed by SEEK International Investments, and whose members also include Hillhouse Capital and an affiliate of FountainVest Partners. The consortium is proposing to buy all of Zhaopin’s American depositary shares (ADSs) that it doesn’t already own for $18 apiece.

SEEK International owns 61.3% of Zhaopin’s shares and controls 74.6% of its voting rights, according to a statement issued by Zhaopin on the proposed buyout plan.

The offer marks the third such privatization bid for Zhaopin, and is the latest in a series of similar buyouts for U.S.-listed Chinese companies. Many such offers are being launched by management-led groups who believe their stocks are underappreciated by Wall Street investors and can get higher valuations by relisting back in China.

Zhaopin listed on the Nasdaq Stock Market in June 2014 at a price of $13.5 per ADS. It received its first buyout offer 19 months later in January 2016, when a group of investors proposed buying all of the ADSs not held by SEEK for $17.50 apiece. Four months later, a group led by company CEO Evan Guo, which included venture capital firm Sequoia China, launched another bid, offering $17.75 per ADS.

Zhaopin said it has set up a special committee to consider the latest offer. Zhaopin ADSs closed down 0.4% at $15.94 in the latest session in New York. The stock has traded as low as $13.70 and as high as $16.90 over the last 52 weeks, reflecting changing investor sentiment about whether a buyout would close.

Out of about three dozen buyouts announced by U.S.-listed Chinese companies over the last two years, a little over half have actually closed, most of them uncontested. But several buyer groups were forced to raise their bids after shareholders complained the price was too low, and at least two other cases resulted in bidding wars.

Contact reporter Yang Ge (geyang@caixin.com)