Another day, another buyout for a Chinese U.S.-listed firm, as Gridsum Holding (Nasdaq: GSUM) becomes the latest to agree to a privatization deal.
The provider of cloud-based big-data analytics said a statement Thursday that it will be acquired for $2 per American depositary share by a group of investors led by its chairman and chief executive officer, Guosheng Qi.
The deal represents a 217% premium from Gridsum's closing price before it received the original offer in early May. It values the company at around $75.5 million in equity value. The buyout is expected to be funded by a combination of “rollover” equity and cash, according to Gridsum.
The news sent Gridsum’s stock soaring 36% to $1.64 per share by midday Thursday.
Qi and the group of investors have made efforts to buy out the company since July 2019; at the time, the stock was trading near $3 per share.
Meanwhile, Gridsum's stock has been on jagged a downtrend since its IPO in September 2016. Through the sale of 6.7 million shares, Gridsum raised $87 million in its IPO. The Beijing-based firm’s stock is now down 87% to date.
(Yahoo Finance!: GSUM)
The news today makes Gridsum the latest Chinese U.S-listed firm to accept a buyout deal—joining a slew of companies, weakened by the Covid-19 outbreak and Sino-American tensions.
This week alone, four Chinese firms have either received or accepted a buyout deal. Among these were the announcements that Chinese gaming giant Tencent Holdings Ltd. (HKEX: 0700) struck a deal to buy search engine platform Sogou NYSE: SOGO). On Monday, Sina Corp (Nasdaq: SINA) also said it plans its privatization, as well as Weibo Corp's (Nasdaq: WB).
As Washington has threatened to delist Chinese firms from its bourses if they don’t comply with auditing standards by 2022, some companies have been fearing for the worst by either mulling or accepting buyout offers.
The merger for Gridsum is anticipated to close in the first quarter of 2021.