The stock in Yintech Investment Holdings (Nasdaq: YIN) surged 9% to $7.21 per American depositary share by midday Monday on the news that it has agreed to be taken private by a group of “rollover shareholders” with a plan of a merger that values the company at roughly $540.2 million.
The Shanghai-based provider of investment and trading services said in a statement today that each ADS of Yintech will be exchanged for the right to receive $7.30 in cash without interest. The deal represents a 38% premium from the closing price of its last trading day in June before receiving a proposal from its management team. Last time the buyer group included Yintech’s co-founders of Yintech, Wenbin Chen, Ming Yan, and Ningfeng Chen to purchase the company at $6.80 per share.
This deal includes the same buyer group as last time along with certain other shareholders.
According to the Yintech, the rollover shareholders plan to fund the merger deal with cash on hand, available lines of credit, and other sources of funds available to the group. The deal does not require a shareholder vote approval.
The news follows a slew of buyout offers and deals regarding U.S.-listed Chinese firms in recent months. One of the latest to accept a deal to be taken private was Cellular Biomedicine Group, Inc., (Nasdaq: CMBG) in which stockholders will receive $19.75 for each share they own. Last month, the Chinese gaming giant Tencent Holdings Ltd. (HKEX: 07000) proposed to take Sohu.com Ltd.'s (Nasdaq: SOHU) search engine arm Sogou Inc. (NYSE: SOGO) private for $9.00 per share.
With trade tensions continuing to escalate between Beijing and Washington, many Chinese firms have at least been weighing buyout options.
Meanwhile, as China has been on a massive crackdown on Fintech, Yintech’s stock hasn’t fared too well in recent years. Since hitting a trading high of $22.97 per share in March 2017, the stock has been on a gradual decline. Shares of Yintech are down nearly 69% to date from that high. Yintech made its trading debut in April 2016, raising $101 million by offering 7.5 million shares at $13.50 each.
(Yahoo! Finance: YIN)
The company anticipates that the merger will close in the fourth quarter.