* Offer of $77/ADS values co at about $10.06 bln
* Board to form committee to evaluate offer
* Offer at 16.6 pct premium to stock’s Tuesday close
(Adds details, background, analyst comment)
By Sai Sachin R
June 17 (Reuters) – Another day, another Chinese tech
company gets a “go-private” bid.
Qihoo 360 Technology Co Ltd said it received a
buyout offer from a consortium led by CEO Hongyi Zhou, adding
the mobile security software maker to a long list of Chinese
tech companies that have gotten offers to drop their New York
listings and head back home.
Qihoo, which listed in the United States in 2011, may be the
largest Chinese tech company to receive a “go-private” offer in
recent months, Summit Research analyst Henry Guo said.
The company has a market value of about $8.63 billion based
on its Tuesday close.
“It’s a little bit of a surprise because the market cap of
the company is a bit larger,” Guo said.
A string of smaller Chinese companies, such as Renren Inc
, 21Vianet Group and E-House China Holdings
, have all received “go-private” bids in recent weeks.
Tech executives at several Chinese companies are betting on
higher valuations back home, where stock markets have been on
fire for some time.
China’s ChiNext composite index has soared 156.6
percent so far this year, eclipsing the 27 percent rise in the
Nasdaq OMX China Technology Index.
Many of these companies also hope to avoid any legal fallout
when Beijing formally outlaws foreign shareholder control of
firms in protected tech sectors.
Other Chinese firms on the “go-private” bandwagon include
Shanda Games Ltd and Perfect World Co Ltd,
which have already agreed to be taken private, while online
dating service Jiayuan.com and medical RD services
provider WuXi PharmaTech said they are considering it.
Qihoo, whose flagship product was used by 778 million
smartphone users, said its board would form a committee to
evaluate the offer of $77 per American depositary share (ADS),
or $51.33 per ordinary share.
The offer is at a 16.6 percent premium to the stock’s
Tuesday close of $66.05, valuing Qihoo at about $10.06 billion
based on its outstanding shares as of March 31.
The company’s U.S.-listed shares rose 8 percent to $71.35 on
Wednesday.
Qihoo’s market capitalization did not show its full value,
and privatization is “what we must do to bring out the company’s
worth,” Forbes quoted Zhou as saying in an internal e-mail. (onforb.es/1GOQxBX)
Zhou, who is also Qihoo’s co-founder, served as chief
executive of Yahoo’s China unit from January 2004 to
August 2005.
Up to Tuesday’s close, Qihoo’s shares had risen more than 15
percent this year.
(Editing by Joyjeet Das and Simon Jennings)