Recruitment Specialist 51job’s Shares Slump Amid Regulatory Hullabaloo

Nasdaq-listed shares of 51job Inc. lost as much as a quarter of their value Monday, closing down 19.2%, after the human resources company signaled that Chinese regulatory scrutiny could delay its plan to go private.

In a statement released before U.S. markets opened on Monday, the Shanghai-based company disclosed that a buyout group formed to take it private has been in talks with Chinese authorities over recent regulatory changes that may affect the deal.

“The consultation process by these buyer consortium members is currently ongoing and a clear timeline to its completion cannot be provided at this time,” the statement reads.

51job, which had aimed to complete its privatization by the end of the year, did not name any specific regulatory changes or regulator. But it’s just the latest headwind for a recruitment firm that has been lashed by the pandemic and fierce competition, alongside a crisis of trust in U.S.-listed Chinese concept stocks and growing scrutiny of data handling at home.

In January 2020, shares of 51job reached as high as $92.61 in the U.S. They slumped as low as $50.61 on Monday, before closing at $54.22.

51job announced in June that it would be acquired by a consortium of investors led by DCP Capital Partners in a transaction that values the company at roughly $5.7 billion. The group also includes buyout firm Ocean Link Partners and 51job co-founder and CEO Rick Yan.

The deal was set to be one of the largest buyouts of a U.S.-listed Chinese company this year, according to data compiled by Bloomberg.

Founded in 1998, 51job provides human resource services in China, including recruitment and employee retention.

The company reported 32.6% year-on-year growth in second quarter revenue to $170.2 million as it recovered from the pandemic, while profit increased 21.8% to $105.1 million.

Contact reporter Kelsey Cheng (kelseycheng@caixin.com) and editors Joshua Dummer (joshuadummer@caixin.com) and Flynn Murphy (flynnmurphy@caixin.com)

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