E-commerce Firm Jumei Scraps Privatization Plan
Online cosmetics seller Jumei International Holding Ltd. said it was scrapping its management-led plan to go private, ending a nearly two-year-old bid that saw it come under fire for offering a price that was criticized as too low.
Jumei first announced its receipt of a buyout offer in February 2016, valued at $7 for each of its American Depositary Shares (ADSs). Since then, the company’s share price has tumbled from about 10% below the offer price at the time to its current level of about half the offer price.
Jumei said it had received a letter on Monday from its founder, as well representatives from Sequoia Capital, which had been backing the bid, stating that they were withdrawing their offer. It said its management made the decision to abandon the offer as its situation stabilized and its efforts at diversification started to bear some fruit.
Jumei shares rose about 2% to $3.36 after it made the announcement.
The company has yet to release results for 2017. It last reported its revenue fell about 15% in 2016 to 6.28 billion yuan ($952 million), while its profit grew by 16% to 142 million yuan.
Jumei was one of about three dozen Chinese companies that announced plans to privatize from New York, in a wave that crested in the first half of 2015 when China’s domestic stock markets were in a major rally. Most of those companies believed that their shares had languished and become undervalued due to lack of appreciation by U.S. investors, and were aiming to privatize from New York and re-list back in China.
Many of the bids were like Jumei’s, launched by groups led by the companies’ top managers. That led some U.S. shareholders to criticize the bids as too low, saying the management-led groups were being opportunistic by making offers that grossly undervalued the companies. Jumei was the subject of such criticism from U.S. investor Heng Ren Investments, which complained the $7 offer “substantially undervalues the company.”
Jumei Chairman Chen Ou responded with a posting on his microblog addressing some of Heng Ren’s major points related to its strategic decisions. It also refuted Heng Ren’s claim that Jumei’s management team had become unreachable since launching the bid, saying its team had frequent interaction with its investors.
Contact reporter Yang Ge (firstname.lastname@example.org)
Sep 30 05:44 PM
Sep 30 05:19 PM
Sep 30 04:44 PM
Sep 30 02:29 PM
Sep 30 02:00 PM
Sep 30 01:47 PM
Sep 30 11:59 AM
Sep 29 05:36 PM
Sep 29 05:23 PM
Sep 29 12:43 PM
Sep 29 12:36 PM
Sep 28 07:00 PM
Sep 28 03:53 PM
Sep 28 02:24 PM
Sep 28 12:22 PM
- 1In Depth: Experimental International Reactor Powers China’s Dreams of Limitless Energy
- 2In Depth: Will Huawei Become China’s Tesla Challenger?
- 3China Developer Evergrande Denies It’s Seeking Government Support
- 4China Expands Access to Qualified Foreign Investment Programs
- 5Neglected Rural Areas to Get Bigger Share of China’s Land Sales Windfall
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas